Wednesday, 15 March 2017

Solar Cloth Company administration creates more questions than it answers

The Solar Cloth Company raised around £1m on Crowdcube and within 18 months it had collapsed, taking all this and other money with it. 

It is one of the scandals that Crowdcube try very hard to ignore. Recent revelations by the liquidator will make this much harder. It really is one massive bloody mess entirely facilitated by the Crowdcube platform. It looks likely that the final outstanding loss will be north of £3m. Crowdcube will of course have kept their revenue from the 'deal'. 

We have written about the lack of due diligence carried out by Crowdcube on the CEO - Perry Carroll, or Peregrine Carroll, or Perry Sakarta Carrol or any other aliases he used at Companies House to hide his bankruptcies and failed enterprises. According to the Crowdcube pitch he was a leader in his field and a successful businessman. They simply never bothered to check.

This is what the Crowdcube pitch stated in 2014 -

Key drivers: Sales will benefit from a combination of a higher company profile, increased install base, and intense lead generation activity from an enlarged sales team.
Sales estimates: Sales forecasts of £7.5m, £40m and £48m over the next three years are in line with other new entrants to the photovoltaic industry. A B2C installer of solar panels demonstrated a similar rapid growth over three years of £0.2m, £7.5m and £26m.

Basis of modelling: The company sales forecast has been modelled on industry averages. Sales projections are conservative and within reach of the company structure. A current pipeline of over £4.5m has been achieved with only one full-time sales professional.

The evidence very clearly shows that all this was rubbish. Instead of £7.5m, the company's revenue was £180k and instead of £40m the company was closed. The obviously outrageous claim to a current pipeline of £4.5m is simply a lie. All of this was checked and rechecked by the Crowdcube DD department before they published it on their FCA regulated platform. It is clear the platform is not fit to hold a FCA licence of any description.

Now the interim report shows just how poorly run this company was. The debt declared by the directors on collapse, that was due to their landlords, was put at £600. The claim that has come in from the landlords agents is for £185,000. This is sounding a bit like the reverse of the Crowdcube projections.

Meanwhile nothing has been done to sanction Crowdcube, who despite claims to the contrary, are still pumping out fantasy numbers for companies that will never get close to them. They have friends in high places. The FCA are still sleeping on it - literally.

The final report will reveal just how far off the mark Crowdcube were. A recent article here is worth a read. 

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