Cape Fisheries - another Crowdcube success goes bust.

Cape Fisheries raised £136k on Crowdcube in summer 2015. Now they have been closed by CH. No news of what happened to the money invested by 121 Crowdcube clients.

There are some very large sharks off South Africa, the homeland of Cape Fisheries. Looks like some of them decided to pop over to the UK and help themselves to some easy money from Crowdcube clients. 

Since funding this company has produced only a few lines of accounts - hardly even a minimum. Now it is dead. Something stinks. 

You do have to ask what the platform was doing allowing this business anywhere near to their 'investors', with projections and a PD that showed impressive credentials and much jam the morrow. No point in asking Crowdcube though as they are now well used to batting away such complaints. 

Myshowcase's final crash

Our recent report of the give away of Crowdcube funded MyShowcase to Miroma Group has now been confirmed. A communication from Crowdcube, who are the nominee account holders in this mess, states either agree to this or the business will close. And you have 4 days to take legal advice and decide. 

Investors in MyShowcase via Crowdcube will get 12.5% of the new Myshowcase, whereas they bought 13.7% via Crowdcube for £1m. These new shares have no rights. Miroma will get all the MyShowcase shares for nothing. Miroma have recently signed an agreement with Reach4Entertainmant in the US which may help the business.  

As usual, the poor investors that believed in Crowdcube, have been royally hung out to dry whilst Nancy and her cronies have been rescued from a sunken ship; at their expense. Whilst the communication goes on to say that this is unlikely to effect investors EIS reliefs - as the deal is at 'arms length', we feel these are rather short arms. Given the fact that the founding CEO of Miroma was a major investor in MyShowcase. In fact if you were really cynical you might think this was all a set up.

We know the FCA are hopeless but are they really that stupid?

Yet another Crowdcube Bond issuer fails.Taylor St Baristas files a £800k loss.

Hi - Hot from the Swamp today we have the Taylor St Baristas accounts. TSB used Crowdcube to raise £1.8m on a 4 year 8% bond. Target profits for YE Mar17 were just over £1m; generated by 20 coffee shops. The £800k loss has been generated by just 10.

Yet again we see the sort of ludicrous projections that Crowdcube promote on their platform coming to a sticky end. TSB now operates just one more unit than it did before it took the money off investors. Where did the £1.8m go? Who knows but.its gone.

So what? Investors are still getting their interest payments. Well yes for now they are. But with a BS at March 17 of minus £1.2m and no new funding since, it all looks a little stretched. The money is due back in 2019.

Investors can do nothing even if TSB collapse, as the bond was issued by a 100% subsidiary - Coffee Bond plc. Coffee Bond plc would eventually go bust but has no claim over the assets of TSB - as in the Square Pie fiasco. This no sense arrangement comes courtesy of the Crowdcube Primary 7 Bond Origami Group. Bless.

You would love their Bond Invitation Document  - this one was certainly Licensed to Thrill.

It all fits with our news breaking story of the Sqaure Pie failure, which was picked up by The Times today and the poor performance of both The Eden Project and River Cottage, whose bonds are due for repayment soon. Dont you just love the way Crowdcube sidestep the important issues and continue to produce a constant stream of PR sludge.

Swamp out.

Insolvency Service get it wrong again over Solar Cloth Co

The UK Insolvency Service has looked at the dealings of the Director of The Solar Cloth Company and decided that they do not warrant any action. 

No that is not a joke. 

You may remember the SCC. It helped itself to loads of investors cash using false information about the founder and his previous antics. The story was well written up in The Times. It was a caste iron case of fraud - all helped out by the Crowdcube platform.

Now in letting this individual go, without any reprimand the Insolvency Service quotes Section 6 of the Company Directors Disqualification Act 1986 where in order to be disqualified, said director has to have acted in a way that makes him unfit to be a company director. Text below -

Dear Sir/Madam, 

The Solar Cloth Company Limited Company Directors Disqualification Act 1986 I refer to previous correspondence in this matter and advise that as a result of the investigation undertaken, the Secretary of State does not propose to take disqualification proceedings against the directors of the above company. Such disqualification proceedings when brought are done so pursuant to Section 6 of the Company Directors Disqualification Act 1986. 

Whilst this may not be currently relevant to you it might be helpful for the future if I advise you of the wording of that section. 

It says: (1) The court shall make a disqualification order against a person in any case where, on an application under this section, it is satisfied — (a) that he is or has been a director of a company which has at any time become insolvent (whether while he was a director or subsequently), and (b) that his conduct as a director of that company (either taken alone or taken together with his conduct as a director of any other company or companies) makes him unfit to be concerned in the management of a company”. 

Accordingly if, in the future, the Secretary of State should learn of any unfit conduct relating to this company it could be included in any disqualification proceedings brought in respect of this or any future company failure. 

Yours faithfully Naomi Fulford 

Well if this guy has not acted in such a way then we are not going to see any companies' directors disqualified ever again. Also, it seems unlikely the company will be able to oblige the Secretary of State in the final comment as it no longer exists! What a ridiculous outcome.

So just beware the presence yet again of one Perry Carroll or whichever name he chooses from his list. He'll be the one flying some amazing money spinning business and asking for your cash.

We wrote about him and SCC here

Clearly something needs to done about the 1986 Act - yet another piece of useless legislation that pre dates the mass use of the internet. Just WAKE UP will you please.

Crowdcube try to make excuses for Rebus failure

Crowdcube's blog now has this posted - a so called explanation by you know who - on Rebus

“As clarification, Rebus had two meetings with ReSolve in May 2014, a corporate finance advisory firm unrelated to Crowdcube, to discuss potential funding options prior to Rebus’ raise on Crowdcube, we were not aware of these meetings and it was not disclosed on the company’s pitch. However, it is normal for businesses to explore different funding options in their early stages, so Crowdcube would not have been surprised or alarmed by the ReSolve meetings. As many entrepreneurs and investors will appreciate, raising finance is difficult and not every conversation with an advisor or investor will result in an investment. Disclosing details of previous fundraising attempts is not standard practice even in traditional fundraising.”

Now there are various problems with this 'clarification' - if that is what it is.

Firstly it may not be general practice for 'fundraising attempts' to be disclosed - no one is looking for a published weekly list of them . However you can be sure that savvy professional investors, VCs and banks will have their ears wide open to the market where these attempts have to be made. So they would have known, as should Crowdcube. Crowdcube didnt know simply because they have no interest in their investors.

Secondly the wording they have used for these failed meetings is very different to the wording issued by the Administrator. He stated that Rebus was in financial difficulty - Crowdcube just say here that the meetings were run of the mill, to look at 'potential funding options'. The two are not compatible.

Given that the Administrator has no axe to grind and Crowdcube do, who are you going to believe? The proof seems glaringly obvious.

Interestingly the Chairman of Rebus made a telling comment when he said that the Administrators' 'interpretation' of events was not helpful.

It seems that the truth can be a right pain in the arse sometimes.

Crowdcube accusation is very serious.

So now we know, Kelvin Mackenzie has direct experience of the Crowdcube shuffle - the move that makes pitches fully funded on the platform.

Mackenzie, now an entrepreneur, was directly involved in a live pitch where he claims Crowdcube performed their magic.

We would love to hear from Crowdcube apologist David Prosser, who has defended the platform with great courage up till now.

Crowdcube deny any wrongdoing which is their default position but it seems impossible for them to be believed. Mackenzie claims he was part of the pitch on the platform that experienced this shuffle - why would he make this up?

See here for a piece in the Times we helped with http://www.thetimes.co.uk/tto/money/article4686065.ece 

Having studied Crowdcube and their methods for 4 years, we are sure that these claims are real - we know from our own experience that pitches can line 'investors' to drip money into the campaign over a steady period instead of investing once. This creates a false momentum, which is misleading and therefore against the FCA regulations.

This is not exactly what Mackenzie is claiming; his claims are even more serious. But it seems highly likely that once you have bent the wire once you will step over it again and again until a new fence is erected.

Just look at the way the platform dresses up pitches, allows grandiose claims to be made which turn out to be nonsense and misses out important information that might put investors off. Even the description of their own CEO is far from honest - why would anyone trust these chancers?

Where in all of this are the FCA?

There will be more.

FCA on a busy afternoon.

Can this really be true - http://www.thesun.co.uk/sol/homepage/suncolumnists/6915655/Corbyn-wants-us-all-to-live-in-terraced-houses.html

In a piece in The Sun today, Kelvin Mackenzie accuses Crowdcube of mass manipulation of their ECF platform.

We have been saying this a while but only have limited evidence - the case of Waterbabies for example.

The Sun has now accused Crowdcube of drip feeding campaigns with 'investment' which is in fact money raised beforehand and provided by the company pitching. This continuous 'investment' ensures the pitch remains at the top of the pile and looks active. The Crowd will then be persuaded to have a go as everyone else is. Only problem is that 'everyone else' is a fudge - according to Kelvin.

We know that Crowdcube play games and have a reputation for pushing regulations to the extreme but this really would be catastrophic for their credibility if its was true.

Anyone with any evidence should step forward now.