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Watch out for ILSCORP.CO.UK mail scam
(Posted 22nd November 2005)

Owners of Web sites in both the UK have been receiving what purports to be a payment demand for an annual listing from ILSCORP.CO.UK that claims to be an internet listing service. The front-page lists: 'how to make payment', 'payment information', 'current payment details', 'please remit payment on or before Nov 30, 2005' and 'payment information'. It is not until two thirds down the back page that the status of this flier is made clear. 'This is not a bill. This is a solicitation. You are under no obligation to pay the amount stated unless you accept the offer.' Similar letters have also been sent out by ILSCORP.NET to web owner sin the US. The payment demanded is typically relatively small. I received a bill for £47.50 to cover an annual listing. Presumably the hope is that accounts departments will just pay it without asking questions.

The address given for payment - Suite 505, 14 Tottenham Court Road, London - is an accommodation address run by Mail Boxes ETC.  ILSCORP has previously used an accommodation address in Cambridge (Mail Boxes ETC Cambridge, Parkers House, 48 Regent Street, Cambridge CB2 1FD. Telephone: +44 (0)1223 505777, Fax: +44 (0)1223 505445, Email: info@mbe-cam.co.uk). Following complaints the mailbox facility was withdrawn. Mail Boxes ETC is a franchise operation as the Tottenham Court website explains: 'MBE is a UPS® company. The UPS Store® and Mail Boxes Etc®. centres are independently owned and operated by franchisees of Mail Boxes Etc., Inc. in the USA and by its master licensees or their franchisees outside of the USA. Services and hours of operation may vary by location. ©2005 United Parcel Service of America, Inc.' MBE's Global Home office is at 6060 Cornerstone Court West, San Diego, CA 92121-3795, tel: (1) 858-455-8800.

Although it is a franchise operation it is surprising that the Cambridge company did not issue a warning about ILSCORP to other Mail Boxes ETC franchises.

The ILSCORP.CO.UK site is registered by Hans Bota of PO Box 233, Bloemfontein 9300, South Africa, while ILSCORP.NET is registered by William Hughes of 12 Damraak, Amsterdam 2123. ILSCORP.CO.UK and ILSCORP.NET  are described as 'scams' on a number of internet sites.

It is very difficult to establish whether ILSCORP actually provides a service. Neither of their sites lists a telephone number. ILSCORP.CO.UK warns that 'requests made via email can take up to 2 business days to receive a reply' while ILSCORP.NET may 'take up to 5 business days to receive a reply'.

On 21st November investdrinks contacted Mail Boxes ETC at Tottenham Court Road and received a prompt reply from Girvin Vincent.

'In answer to your query, yes we are aware of this company having been contacted by the Advertising Standards Association. We are currently also liaising with Mark Cox of Camden Trading Standards about what legal action we can take. Mr. Cox is currently exploring the legality of seizing Ilscorp's mail but has yet to come up with a definitive answer.

I would like to assure you that, when we find people using our facilities for nefarious schemes we fully cooperate with the respective authorities and in fact when our suspicions are aroused, we will be proactive in the matter. We are in the process of closing down Ilscorp's  mailbox.'

I hope ILCORP's mailbox will soon be closed and that Mark Cox will find that is legal to seize ILCORP's mail. Furthermore it would be sensible if all the Mail Boxes ETC franchisees were warned about ILCORP, so that they do not simply opne a new account at another company branch. investdrinks urges anyone receiving a scam bill from ILSCORP to complain to the mailbox company concerned.

BVI ceases trading
(Posted 18th August 2005)

Bordeaux Vintners Ltd, trading as BVI, has ceased trading. Director Tim Dunton wrote to investors on 22nd July to inform them that the company ‘had been forced to cease trading with immediate effect’. He blamed this in part on ‘the failure of one of our suppliers to provide wine purchased on behalf of BVI and subsequently taking up an Individual Voluntary Arrangement leaving a substantial amount of wine undelivered.’

Dunton claims that ‘Though this situation is beyond the control of BVI and therefore not our legal responsibility I have personally endeavoured to replace this shortfall with wines of a similar value. I have also put a substantial amount of my own personal funds into the company to pay for your storage and insurance with Octavian up to this date.’ Dunton claims that ‘Unfortunately I cannot afford to further this cause as I have placed myself in financial difficulties.’

Of course BVI’s clients’ contract is with BVI and not their unnamed suppliers. It is not known what quantity of wine BVI has been unable to supply to its clients.

Dunton has agreed a deal with uvine, a respected and legitimate wine trading company. Uvine will charge BVI clients 5% on buying and selling. Significantly Dunton admits that ‘In fact you will also be able to purchase wines at a value that BVI simply could not match.’ This is a breathtaking statement of the blindingly obvious. Companies like Bordeaux Vintners Ltd, who purchase their wines from UK wine brokers, cannot possibly be competitive while running their businesses effectively. The additional margin they have to charge inevitably makes buying wine from them a bad investment. It is amazing that Dunton did not work out this elementary fact before setting up his wine investment company and seeking to convince clients that BVI was able to offer wine as an investment.

Bordeaux Vintners’ annual return, due in early November 2004, was finally filed on the 11th August 2005. The last company accounts, which should have been filed in January 2005, remain overdue.

Christopher Burr MW, chairman of uvine, told investdrinks that it looks like half the clients of BVI are transferring wine held at Octavian into their own accounts there with the rest asking uvine to trade it for them. Due to the high prices charged by BVI investors are likely to receive less on the open market than they paid for their wine.

Apparently a storage debt owed by BVI to Octavian has now been settled and wine can now be released. It is not known how much wine is missing but it may be mainly 2000s bought en primeur. investdrinks’ advice to clients of BVI is to transfer wine into their own accounts as soon as possible. Those thinking of trading their stock may wish to consider hanging onto early next year as the arrival of A-Day in April 2006, when wine can be included as part of a personal pension, looks likely to push prices up.

Glennstewart International/LMDV - claim your cask
(Posted 19th April 2005)

Investors in LMDV Ltd (formerly Glennstewart International) are urged to come forward to claim ownership of their whisky casks.  A large number of whisky casks sold by Antony Evans of LMDV Ltd are lying at the Speyside Bonding warehouse in Glasgow. These are stored in the name of Westwind SA, a Belgian company. The current status of Westwind SA is not known as investdrinks understands that in 2003 it was in breach of Belgian company law as Antony Evans was the sole director and Belgian law requires at least two directors.

From the list of cask owners is clear that many of the cask owners live in Asia-Pacific. Others probably come from Italy and the Scandinavia. If you bought whisky casks from LMDV, then you should contact Paul Smith of the Malt Whisky Buyers Helpline on 01539-729580 or mwbh@talk21.com. There are also casks of Cognac believed to be worth around £70,000 in storage in Cognac in the name of LMDV Ltd. The liquidator is understood to be looking into this but it is not clear what will happen to these casks as there are already considerable charges due on them. 

LMDV Ltd taxman sole creditor
(Posted 7th February 2005)

According to a report submitted to the High Court in London on 20th August 2004 the sole creditor of Antony William John Evans's bankrupt LMDV Ltd is the UK Inland Revenue, who is owed £91,191. If there are other unrecorded creditors, they need to contact Michael Stevenson of Middleton Partners on 023 8027 1727.

David Allan
(Posted 8th November 2004)

David Allan, who ran Allwines which went into liquidation in April 2001 with a deficit of £3 million, died in Budleigh Salterton on 25th May 2004. Allan lived with his wife Yvonne at 15 Meadow Close Budleigh Salterton Devon EX9 6JN Many of Allwines clients appear to have been defrauded by Allan. Either Allwines failed to buy the wine or the same wine was sold several times or wines were sold without authorisation. After Allwines went into liquidation, Allan disappeared, although several of his creditors attempted unsuccessfully to trace him. Several wine investment clients of Allwines, led by Dr Kenneth Jewers a former friend of Allan, are now considering a class action against Allan's estate.

Longest running whisky scam wound up
(Posted 25th August 2004)

LMDV Ltd, formerly Glennstewart International Ltd, was wound up in the High Court in London on 21st July following a petition served by the Inland Revenue on 14th June 2004. The whisky cask scam was run by Antony Evans and probably survived as long as it did as Evans' investors were outside the UK often in mainland Europe or Asia-Pacific. Evans was last heard of in Berlin. The case is now in the hands of the Official Receiver, 21 Bloomsbury Street, London WC1B 3SS. The company was originally called Spring Jasmin Ltd (!!) and became Glennstewart International Ltd in April 1995.

Message from Tom Nash, an investor with Ashley Jenkins

investdrinks is happy to post the following message:

'To all clients of Ashley Jenkins

I'm putting out feelers to establish who is still interested in recovering monies owed to them as a result of the Ashley Jenkins scam of 2001-2003.

Thanks to Eric Smart, Paul Smith of Pearson & Pearson, solicitors, has registered our collective complaint with the Financial Ombudsman concerning payment by a combination of credit card and cheque (my template letter to my own bank is above, as advised by Paul Smith, and I confirmed to him recently that I did indeed deal with a UK-based organisation when AJ first contacted me - see paragraph below).

The other line of inquiry I have taken is regarding the duty of care incumbent on the FSA, who, as far as I'm concerned, failed in their duty to protect the consumer. The second para below, concerning my dialogue with Stephen Gilchrist of Saunders & Co., solicitors, is particularly relevant, because we would need to pay out a sum of money to take advice on whether it would profit us to sue the FSA. Gilchrist believes we might have a case. He has dealt with other 'investment scheme' victims and won, so we are dealing with the correct person.

Please email me back if you are interested, in principle, in contributing towards the cost of engaging Stephen Gilchrist's services.

Paul Smith of Pearson's rang me yesterday. The issue of paying AJ a deposit by credit card and the remainder by cheque through your bank is with the Financial Ombudsman now, and will take about 6 months, according to Paul. I've enclosed the letter I wrote to my bank a few weeks ago as reference. Key to this, according to Paul, is whether the business you did with AJ on Scheme 1 (closed by the FSA in November 2001) was in the UK. Mine certainly appeared to be: my cheque went through Barclay's Bank in the UK and I dealt with the 72 New Bond Street office by telephone (okay, we know now that these calls were probably being diverted to Seville, but the point is the money went through a UK-based bank, with the registered office in London. AJ Spain was a separately registered company).

Secondly: Stephen Gilchrist of Saunders & Co has emailed me below on the other line of inquiry I'm taking - failure by the FSA to inform investors in AJ that they had closed down Scheme 1. My opinion is that we have to pursue this. I fully realise how difficult it is to take the Government to court, but at least we should find out if we have a case (Equitable Life and BCCI cases were quoted to me as examples by Gordon's Solicitors in Bradford as contrasting results of a defendant attempting to sue the Government). My limited knowledge of the law tells me that the FSA acted negligently / with misfeasance: what are they in place to do? Protect the consumer. They failed to do that. Technically it was the responsibility of AJ to contact its investors, either directly or via its solicitors, Boodle Hatfield, regarding Scheme one being closed down, but given that the FSA knew that Boodle Hatfield had taken their client out of the jurisdiction of the 1986 (and 2000? I'm unsure of this one) Financial Services Act, was it not their responsibility to inform? It appears from the evidence thatthey were aware of what was happening, but failed to act on it.

Best regards,

Tom

Please reply to Tom Nash on thomasnash@btinternet.com

Wigglesworth Wine Company - court order
(Posted 28th May 2004)

Chris Beaman of JEB Trading Ltd, Buckhurst Hill, Essex has obtained a county court order against William Hancock trading as Wigglesworth Wine. Hancock has been ordered to pay £15,153.23 by Harlow County Court for failing to supply wine ordered by JEB Trading Ltd. Hancock has not responded to the legal action or offered any defence. The action relates to 21 cases of wine (15 cases of Italian/ 6 of white Burgundy) from four orders placed in September and October 2001. In all JEB Trading Ltd ordered and paid for 27 cases from William Hancock. Only six were received. The court has now issued a Writ of Fieri Facias and it is now just a question of time before the High Court Sheriff executes the judgment.

Fraudster Jupe hit with five years
(Posted 21st May 2004)

Today Stephen Jupe was sentenced to five years imprisonment. Sentencing Jupe on three counts of fraudulent trading and one of using a prohibited name, His Honour Judge Stewart said that "this was a dishonest scheme from the outset." Stewart observed that when the first brochures were sent out Marshall Wineries had no source of supply. The source they eventually choose (Speyside) had no track record, "it was completely unknown and had just started". Jupe pretended that Grandtully was a working distillery and Jupe made a specious offer when Grandtully declared the entire 1993 production to be premium. This was completely meaningless and was merely a device to keep customers compliant."

"Although Jupe claimed that the investors were mature and sophisticated, in practice many were retired people who lost a significant proportion of their savings." Alka Ladva of the Serious Fraud Office commented. "This sends out a signal that the sentence fits a cynical and calculated fraud."

Jupe appeared quite relaxed in court while he awaited sentencing it may be that he expected a lighter sentence. Certainly as he was ushered out to start his sentence by the warder he appeared shocked and confused. The judge made it clear that he had reduced the sentence because of the time that it has taken for the case to come to court. However, Jupe continued failure to admit even at the pre-sentencing stage that he had done anything wrong pushed his sentence back up. As Jupe stumbled out it was revealed that although he was wearing a smart suit jacket, white shirt and carefully knotted tie, his lower half was clad in jeans. A fitting metaphor for Jupe's whisky investment scheme.

investdrinks is delighted that His Honour Judge Stewart has sent out a clear warning to white collar fraudsters that they will be dealt with severely. This type of fraud does have victims - often pensioners who can ill afford to lose their hard-earned savings. The rest of their lives may well be blighted by the calculated lies, deceptions and greed of Jupe and his ilk.

It also shows that a jury (exceptionally diligent and thoughtful - Judge Stewart) can follow a fraud trial. Exceptionally, ten members of the jury came back to court for the sentencing.

Jupe's five years also signals that, if you are guilty, then it would be sensible to enter a guilty plea. Another example of Jupe's continued stubbornness and stupidity that he has been prepared to put his wife and his two young children (eight and six) through years of uncertainty and hell because of his consistent refusal to accept that he has done any thing wrong.

(A fuller report will be posted next week.)

Won't get Juped again!
Scamster Jupe guilty of fraud
(Posted 26th April 2004)

On Friday 23rd April around 11am the jury, who had been considering the case against Stephen Jupe for two and half days, came back to court and returned guilty verdicts on all four counts. Count one covered defrauding investors through Marshall Wineries; count two defrauding creditors by allowing Marshall Wineries to continue to trade while insolvent; count three covered activating Marshall Wineries Ltd as a phoenix company once Marshall Wineries went bust in November 1996; and count four covered using a prohibited name. Marshall Wineries Ltd was virtually identical to the trading name of the now bust Marshall Wineries.

A serious jury

The jury took two and half days to reach their verdict. This was another indication of their serious approach to their task. During the trial they had asked an unprecedented number of questions. They clearly saw through Michael Hopmeier's knock-about speech in defence of Jupe. Hopmeier did well with the thin stuff at his disposal as much of the evidence was so damning that he could only invite the jury to take a fleeting look, for instance, at Marshall's brochures. He did ingeniously suggest that the company's claim to experience actually related to Jupe and Daulby's work in the financial services sector before setting up Marshall Wineries. Jupe made no such claim - presumably only too aware that his stock-broking experience with a fraudulent company was not something he wanted the jury to know about.

The verdict and the jury's conduct also helps to give the lie to those who say that a jury cannot follow a complicated fraud trial, although it has to be said that Jupe's fraud was not particularly complicated. There were no overseas companies and bank accounts involved. More pertinent is the question whether it is possible to find juries prepared or able to serve for two and half months. This becomes much more problematic with fraud cases that last up to a year and more.

SFO success

This is the third successful trial that the SFO has mounted against drinks investment frauds. This verdict maintains their 100% record. Jupe is the fifth fraudster to be found guilty and he follows Lewis Daulby (Jupe's initial partner in Marshall Wineries before he set up Cavendish Wine Merchants/Hamilton Spirit Management), Lee Rosser (Cavendish Wine Merchants/Hamilton Spirit Management/House of Delacroix), Julian Blee (Hamilton Spirit Management/House of Delacroix) and Craig Dean (House of Delacroix).
(See also: sfo.gov.uk/news/prout/pr_248.asp?id=248)

A curious Christian

For a proclaimed devout, evangelical Christian Jupe is a decidedly lousy advert for his religion. During the life of Marshall Wineries he told a series of lies both in print and in person, so as to defraud both customers and creditors of the company.

Similarly over his long stint in the witness box fraudster Jupe continued to lie. It may well have been the stress of lying over several days that brought on the chest pains that caused him to go to his doctor to get medication. Jupe spent long hours in the box maintaining the fiction that Grandtully whisky was ever a potential investment, especially at the grossly inflated price at which it was sold. It was also clear that Jupe's knowledge of the drinks' industry remains sketchy. He even suggested that Blanc de Blancs Champagne is made exclusively from Sauvignon Blanc until he corrected this to Chardonnay.

Jupe was also determined to smear people like Mark Reynier of La Reserve and Andrew Jefford, the journalist who first exposed Jupe's fraudulent activities in the Evening Standard back in November 1995. He claimed that Jefford, Reynier were part of a conspiracy to bring him and Marshall Wineries down which involved the DTI, SFO and the SWA (Scotch Whisky Association).

Subsequently the media exposed Jupe's attempts to give Marshall Wineries and Marshall Wineries Ltd the gloss of respectability through associations with the National Maritime Museum in Greenwich and the Great Ormond Street Hospital. Both organisations smartly dissociated themselves once they realised the true nature of Jupe and his fraudulent businesses.

Donating some £40,000 of the company's money to UKET, an evangelical Christian organisation only added to Marshall Wineries financial problems. Jupe maintained that this was Marshall's "putting something back into the community".But this was small compared to the £450,000 that Jupe siphoned out of the company for his own use mainly to buy and renovate a house, close to Putney Heath, in Roehampaton, London. Jupe was the sole signatory on Marshall's bank account and clearly believed that the company's money was his own.

When the company went bust on 26th November 1996, it owed £84,000 to the Inland Revenue, £300,000 to trade creditors, £136,000 to customers and £179,000 to Barclaycard, who gave notice on 4th November 1996 that they would be withdrawing their facilities in 14 days as part of their general policy to get out of the highly dubious whisky and Champagne investment sector.

Like a wild boar

At times in the witness box, the stocky, squat, short-necked, bearded Jupe looked like a cornered, irascible wild boar. It was evident that Jupe is both extraordinarily arrogant and that he takes himself with ludicrous seriousness. Witness his extraordinary outburst at the end of his time in the box when he delivered a sub-standard pastiche of Martin Luther King's 'I have dream' - a paean of praise to private enterprise fraud - "I have a vision of a different country - free of cartels, government interference and where competitors will not be able to conspire with government agencies against innovative companies.

This richly comic interlude was only cut short by the judge remarking that Jupe had strayed away from the point.

At no time did Jupe express the slightest regret that his actions had cost investors and creditors several million pounds. It was never his fault rather other people's mistakes or a conspiracy against him because his innovative business threatened the status quo of the whisky industry.

Why not plead guilty?

Watching the trial, investdrinks could only wonder why Jupe did not plead guilty. The evidence that he had misled investors was evident and compelling. The initial brochure of April 1993 was full of lies and misrepresentations - neither Jupe nor his partner Daulby, later convicted for fraud over the Cavendish/Hamilton Spirit Management, had any of the experience claimed. Nor did they have a source of supply, even though they had fixed the price of the casks. It was not until 12th July that Daulby and Leonard Bayliss first met Ricky Christie of the Speyside Distillery and it wasn't until late August that the first order was placed following an agreement with Speyside. Yet Marshall Wineries had been assuring investors since at least May 1993 that their casks had been selected and bought. Furthermore the whisky finally selected - Speyside to be sold as Grandtully - was completely unknown and untried as the distillery produced its first spirit on 12th December 1990. Jupe can have had no idea of the whisky's potential as none of Speyside's production had yet passed the three-year mark when it ceases to be just spirit and legally becomes whisky.

investdrinks can only assume that it was a mix of arrogance and self-deception that persuaded Jupe that he could hoodwink the jury and get off. Did he consider that Daulby, who pleaded guilty, got five years for his part in the Cavendish/Hamilton fraud while Rosser, who didn't, got seven years. Doubtless His Honour Judge Stewart will take into account the time and money Jupe wasted by insisting against the evidence that he was innocent.

An angry man

There were flashes of the Jupe anger during the trial when he was being cross-examined by Collingwood Thompson. A witness told of a heated exchange when he visited the offices of Marshall Wineries in an attempt to secure the cases of Champagne that he had paid for. Jupe's parting with Daulby appears not to have been amicable nor that with the late Len Bayliss, who forced Jupe into personal bankruptcy in 1998. Jupe also apparently came to blows with his stepfather at Marshall's offices.

A miserable failure

Although Jupe was proud that his fraud had turned over £3.8 million during the four year's of Marshall Wineries' life ("I think I did rather well" SJ), he can hardly get much satisfaction from contemplating the wreckage of his life. Personally bankrupt, forced to sell the house at 69 Medfield Street, Roehampton, London after living there for only six months and into which he poured much of the profit from Marshall Wineries. Now at 50 he contemplates a possibly lengthy jail sentence away from his wife and three children. It is highly unlikely, however, that Jupe will admit that he is the architect of his misery.

Jupe will be sentenced on Friday 21st May.

Stephen Jupe found guilty of fraud today
(Posted 23rd April 2004)

Jupe was found guilty on all four counts - three of fraud and one of using a prohibited name.

Sentencing will be on Friday May 21st.

Allwines: creditor takes action
(Posted 19th April 2004)

Dr Kenneth Jewers, a creditor of Allwines, is intending to seek litigation against the directors of Allwines and their accountants to recover money invested in wines through the company. Jewers paid for seven cases of Mouton-Rothschild (1982 and 1986) which were supposed to have been stored at London City Bond. LCB have no record of ever having stored this wine. Jewers also believes that the last three annual returns show that the company was 'effectively insolvent'.

The final meeting of creditors will be held on 10th May at 10.15am at Deloitte's offices on the Strand. Although Deloitte clearly consider that David Allan and Allwines warrant an investigation by the DTI to whom they submitted a report, it is also obvious that the DTI will be taking no action. There is insufficient money for Deloitte to pursue legal action against the company, so it is down to individual creditors to join together if there is to be any action.

Any creditors wishing to join Dr Kenneth Jewers should contact him on 020-8460 8769 or ken@ijkmarketing.co.uk

Jupe trial: closing speeches

In the event John Grant of Glenfarclas was not recalled to give evidence (see previous posting) and the prosecution and defence have now made their closing speeches. His Honour Judge Stewart will sum up this week. This is expected to take at least two days, so the jury may retire to consider their verdict on Wednesday (21st).

For the prosecution Collingwood Thompson reviewed the evidence in detail on the four counts, in particular counts one and two. Count One refers to the intent to defraud investors, while Count Two covers the alleged defrauding of creditors. Count Three alleges that Marshall Wineries Ltd, the successor company to Securitized Syndicated Investments (SSI) Limited, was activated to continue the fraud on investors. Count Four covers the use of a prohibited company name (Marshall Wineries Ltd) that is almost identical to one that is in liquidation (Securitized Syndicated Investments (SSI) Limited trading as Marshall Wineries.

Collingwood Thompson described Stephen Jupe as "a man of over-weaning ambition - prepared to take dishonest shortcuts". He was "ruthless as well as ambitious and prepared to smear Mark Reynier' by alleging that Reynier as his competitor was part of a conspiracy to bring Jupe and Marshall Wineries down. He noted that at no time had Jupe been prepared to accept any blame instead maintaining that the failure of Marshall Wineries was down to conspiracies and withdrawal of Barclaycard facilities and the DTI investigation in November 1996. He wasn't prepared to accept that the failure was due to his blind optimism, gross exaggeration and dishonest statements.

Thompson pointed out that despite the claims of expertise made in the first brochure of April 1993 the company and its directors had no expertise or experience in the whisky industry and equally had no agreed supplier of the whisky they were proposing as an investment as they did not approach either Speyside or Glenfarclas until 12th July 1993, when these two companies were asked to quote prices of new fill hogsheads and sherry butts. Despite this delay, Marshall's fixed their prices by "ripping off La Reserve's offer" and using the prices charged by Reynier for Springbank. These prices on "the completely unknown Grandtully with no established presence" were too high for an investor ever to make a profit.

Thompson contrasted this situation with Reynier's offer of Springbank, an already established name and reputation that did provide a modest return (£300 return on a hogshead of Springbank over 10 years) over time. Reynier had long experience in the wine and spirit trade. In 1995 Reynier had offered casks of Glenfarclas but he had not met John Grant until May 1994. Jupe had claimed to have seen a La Reserve advert offering casks of Glenfarclas in Decanter in 1992. For this reason Jupe had ignored Grant's warning about the inherent difficulties in whisky investment. This advert simply did not exist.

Jupe had ignored the warnings of over-production contained in Alan Gray's Scotch Whisky Industry Review. Jupe had claimed to used the Review in his research. In the event no-one had managed to sell Grandtully "except at very low prices". Thompson cited the unsuccessful efforts of Paul Smith of the malt Whisky Buyers Helpline to sell Grandtully.

The prosecution detailed the increasing indebtedness of Marshall Wineries during 1996 citing the number of creditors who had to resort to legal threats to get paid and the sharp percentage of creditors owed money after 60 days compared to the situation in August 1995 when there were no 60 day creditors. By 31st August 1996 77.7% of the creditors were owed more for more than 60 days. Thompson cited Jupe's excessive director's drawings that by August/September 1996 totalled £155,000 with the company also paying Jupe's various mortgages on his house. In defence questioning of witnesses, it had been suggested that Jupe's drawings, taken largely to pay for the renovation of his house, would be more than covered by the value of the house. This is, however, alleged not to be the case as Jupe had three loans on the house totalling £205,000 and also owed a little more than £40,000 to his builders. "He was in hock up to his eyebrows," said Thompson. Another significant contributory factor was the advertising budget. Both the drawings and the level of advertising had been expected to fall following the preparation of the accounts in August 1995. Instead both increased - the advertising because of the hostile Press comment that started with Andrew Jefford's Evening Standard article in November 1995. By December 1996 Marshall Wineries owed the Inland Revenue £76,000 in PAYE and National Insurance plus a £7,000 bill for Corporation Tax. "The company was utterly doomed."

In count three Jupe had started up Marshall Wineries in early November 1996 just as SSI Ltd was going bust and the intention was to carry on the business in the same manner. The VAT application form sent in on 20th November anticipated a turnover of £1.5 million. The new brochure made no mention of the demise of Securitized Syndicated Investments (SSI) Limited and claimed expertise for the new company. "Utterly dishonest," said Thompson.

On count four the prosecution explained that Jupe had no defence to this charge as Parliament has set out that committing the offence is sufficient and that dishonesty does have to be proved. It is enough that Jupe was a director of a similar sounding company for more than 12 months before it went into liquidation.

For the defence Michael Hopmeier started by pointing out that the Scotch whisky industry was a highly profitable one. He cited the change from the price of litre of new fill at around £1.75 (before tax) to a bottle of 10 YO malt at around £25 (retail - after tax). He commented on the time that Jupe had waited for this to come to trial - 1996 to 2004. "A difficult time for Stephen Jupe and his family." Hopmeier suggested that Jupe was a "fairly complex character" with no previous convictions and who had been a stockbroker before setting up Marshall Wineries.

Hopmeier said that it was not a criminal offence to offer casks of whisky as an investment and that everyone seemed to be doing it including Mark Reynier at La Reserve and John Grant of Glenfarclas through the offer made by La Reserve in 1994/5. He alleged that Andrew Jefford was "closely associated with Reynier" and cited an article by Jefford that had been in used in publicity material from Bruichladdich (the Islay distillery a consortium headed by Reynier bought in 2000). Hopmeier was incredulous that Jefford did not know the article had been used. He disputed the critics' view that Grandtully was no good and denied that the use of the non-existent Grandtully Distillery was deceptive. "Vladivar vodka had claimed that it was distilled in Russia until it was discovered that it was actually produced in Warrington." Grandtully was a similar marketing ploy - "a perfectly acceptable name".

"There was a whisky cartel in operation," said Hopmeier. Clearly Jupe's conspiracy theories had a basis as the campaign against him had started in November 1995. Hopmeier pointed out that Ricky Christie had sold a large amount of the production of Speyside to Jupe, which had helped to finance his new distillery. Christie had seen Marshall's brochures. "Did he complain? asked Hopmeier. "Of course he didn't." As for Marshall's excessive prices - Reynier was 'doing the same thing".

Hopmeier pointed out that when Christie had not supplied the £30,000 Bollinger Champagne order, Jupe had gone to his local Oddbins to source it.

Hopmeier disputed the allegation that Marshall Wineries was insolvent from August 1995. None of Jupe's financial advisers or his in-house accountant, Miss Sancar, had warned him that he had to stop trading. It wasn't until 21st November 1996 that Fisher and Sancar warned him that Securitized Syndicated Investments (SSI) Limited was insolvent. Marshall Wineries had been a very successful company - in just four years it had a cumulative turnover of £3.8 million. In 1996 the turnover had been £1.7 million. He disputed the prosecution's contention that Marshall Wineries had no rum stock at Octavian. By their calculations there was a minimum of £76,000 belonging to Marshall's at Octavian and probably £30,000 of whisky held elsewhere.

Marshall Wineries Ltd was not an attempt to deceive. The skills from Securitized Syndicated Investments (SSI) Limited had transferred to the new company.

At the end of his speech Hopmeier asked the jury to acquit Jupe on the first three counts, so appearing to concede that Jupe is guilty on count four as the law views this as an offence of fact with ignorance not a defence. Hopmeier claimed no-one had warned Jupe that he would be committing an offence by using Marshall Wineries Ltd.

The jury have now asked 193 questions believed to be a clear record and surely worthy of an entry in the Guinness Book of Records.

Lighter moments

Southwark's erratic heating and air-conditioning system means that the court yo-yos from sleep inducing heat to bracing cold. On Thursday 15th the cool temperatures forced some of the jury into wearing their outdoor coats and one juror even wore gloves for a while.

Even handed jibes

Both the rather pale skinned Thompson and Hopmeier commented on Mr Wheeler's two-week Easter sojourn in St Lucia. "We now have the benefit of Mr Wheeler who probably thought he had escaped this part of the case." "The bronzed and relaxed Mr Wheeler." "Unlike Mr Wheeler I won't be getting a tan from somewhere." (Collingwood Thompson). "I'm now off to Hastings where the fish and chips are better than St Lucia." (Michael Hopmeier)

Threat of eviction

On Thursday the SFO team were under the threat of eviction from their office near Court 6 to make way for documents required for the big new SFO trial of three solicitors and two clients accused of defrauding investors of £30 million through the improper use of bank documents. The trial, which is expected to last a minimum of a year, gets underway in Court 1 this week.

Don't give up the day job

On Friday John Whitfield revealed hidden skills with a cartoon of the absent Collingwood Thompson.

Jupe trial adjourned until after Easter
(Posted 5th April 2004)

The trial of Stephen Jupe, on three charges of fraud, will resume on Wednesday 14th April at Southwark Crown Court. It has been adjourned because there was insufficient time for the closing speeches, the judge's summing up and the jury to be able to consider their verdict before the court closed for the Easter break. Mark Reynier of La Reserve and the Bruichladdie Distillery on Islay was recalled to give further evidence about the purchase of 17 hogsheads from Glenfarclas in 1994. In his evidence Jupe had claimed that he and Lewis Daulby had seen an advert from La Reserve in Decanter in 1992 offering casks of Glenfarclas and this was why he had dismissed the warning John Grant of Glenfarclas had included in his letter to Marshall Wineries in July 1993 when he declined to supply them with whisky for investment. However, Reynier testified that he had met Grant for the first time in 1994. John Grant will be recalled on 14th April to give additional testimony about Reynier's purchase of the 17 Glenfarclas' casks.

Stephen Jupe's Trial
(Posted 29th March 2004)

Charges: Three counts of fraudulent trading and one of using a prohibited company name

Before: His Honour Judge Stewart

Jury selection: 2nd February
Case started: 3rd February

Prosecution Team
Collingwood Thompson QC Called to Bar: 1975, silk: 1998
Andrew Wheeler Called to Bar: 1988

Defence Team
Michael Hopmeier Called to Bar: 1974
John Whitfield Called to Bar: 1985

At Southwark Crown Court - Court 6
Normal hours of sitting: 9.30am - 1.30pm Monday to Friday

A long stint in the box

Stephen Jupe has spent four days of this week in the witness box being cross-examined by Collingwood Thompson. Thursday was taken up with legal argument. The jury is now down 11.

Building a reputation for Grandtully

Asked about promoting a creating a name and reputation for Grandtully, Jupe maintained that Grandtully was commercially viable, although he did concede that it might start at a disadvantage as it would have to compete with established famous names such as Macallan. Grandtully had a different market and values to Springbank.

Glenfarclas refusal

Jupe explained that he disregarded the warning that John Grant of Glenfarclas included in his letter of 30th July 1993 to Len Bayliss turning down the opportunity of supplying Marshall Wineries with whisky as Glenfarclas were already supplying Mark Reynier's La Reserve. Grant told Baylis that he did not wish to sell Glenfarclas for investment as he could see problems when 'the investment comes to be realised'. Instead Jupe set store on Grant's wishes for their success. (Glenfarclas supplied La Reserve with ten casks on the stipulation that the contents were not to be bottled.) Jupe agreed that they copied Mark Reynier and that "their intention was to out do Mark Reynier in a big way and they did".

18% growth per annum

Jupe maintained that 18% was historically accurate and that on past performance whisky would appreciate by 100% over five years. "Not in dispute - the standard rate in the industry," said Jupe. "The 18% per annum meant an average growth rate of 18% and was not intended to mean 18% compound." The prosecution wanted to know why the brochure didn't say this and instead used the phrase 'per annum' inferring compound growth. Collingwood Thompson pointed out that in the autumn of 1995 that journalist Andrew Jefford had been told by 19 year old Gareth Kent, a salesman for Marshall Wineries that the 18% claim "that's per annum". Jupe described Kent as "quite an experienced salesman" but said that "he had gone completely off-script". The 18% claim had been deleted in later brochures.

'Selling your investment'

Asked about the brochure's claim that casks could be 'traded at virtually anytime' Jupe said that "no whisky other than Grandtully represented an investment. Numerous outlets were available which are also currently available. Well established markets - broking and secondary market. The market was created by Marshall Wineries." The brochure had claimed that the casks could be sold to their corporate clients or used for blending. The prosecution maintained that this was not true as Marshall Wineries through Grandtully only had Speyside as a corporate client, should they be prepared to buy back the whisky.

Blind tasting

Following the Channel 4 programme criticising Marshall Wineries, a Mrs Selwyn wrote in to complain at 'having paid way over the odds' for her cask. Jupe replied assuring her that the whisky had done very well in an 'authoritative blind tasting'.

Immediate transfer of title

Jupe was asked why investors went on a pending list after they had paid for their whisky when the brochures spoke of 'an immediate transfer of title' and 'once the attached order form has been completed and the investment made, the cask of whisky is yours'. He conceded that this was "a statement which was aspirational". Jupe explained that it wasn't always possible to immediately allocate casks once the purchase was complete because the production schedule of Speyside was dependent on factors such as water levels etc. He conceded that investors should have been told of the pending register.

Speyside exercise their lien on casks

Jupe maintained that the Speyside should not have repossessed investors' casks because Grandtully and Speyside had an "implicit agreement" to use the accrued rents to cover money owed to Speyside by Marshall Wineries through Grandtully. Thompson pointed out that the possible solution of accrued rents was not raised until Ricky Christie's fax of 22.11.1996 where he warned that title would not pass if the money (about £100,000) was not paid and the only solution he could see was to offset future rents against the debt. In seizing the casks in 1997 Christie "had reneged on the agreement" and that this action was "dishonest and opportunistic". Thompson pointed out that Jupe counsel had not put this accusation to Christie during his evidence.

Champagne

By September 1989 Marshall Wineries was offering Champagne as a 'valuable opportunity' in the light of the expected increase in demand as the millennium approached. Initially Bollinger 1988 and 1989 had been offered but Jupe came to an agreement with Bertrand Trouillard of Champagne Trouillard to act as their UK agent. Investors were offered the opportunity to buy the 1989 Blanc de Blancs and the 1989 Grande Reserve both at £380 a case ex-cellars. The price included transport to Octavian's bonded warehouse in Wiltshire and one year's storage. In January 1997 Jupe contacted Michael Schuster of WineWise to write tasting notes on the Trouillard Champagnes and to comment on the trade and retail prices that Marshall's were proposing. These were £10.50 a bottle (£126 a case) to the trade giving a recommended retail price of £15.40 for the Trouillard NV and £18.50 trade (£222 a case) and £28 retail for the 1989. Schuster thought that the NV represented 'excellent' value but that the 1989 Blanc de Blancs 'seems pricey at £28'.

Blanc de Blancs?

Asked what grape variety was used in Blanc de Blancs Champagne Jupe initially replied "Sauvignon" and then said "No I think it is Chardonnay."

Marshall Wineries Ltd

The Crown contends that Marshall Wineries Ltd was a 'phoenix company' designed to take over when SSI Ltd failed -"step into the shoes of SSI". Jupe denies this and says that Marshall Wineries Ltd was set up in 1994 in order to protect the name Marshall Wineries, the trading name of SSI Ltd. Jupe claims that the idea of activating Marshall Wineries Ltd as SSI Ltd went into liquidation was discussed with both his accountant, Stephen Fisher, and Ashok Kumar, the liquidator for SSI Ltd. However, Kumar said in his evidence that this had not been discussed and there is no note from Fisher to indicate that the legality of using Marshall Wineries Ltd was discussed. Jupe said that he took silence to indicate assent.

Insolvent?

The Crown maintains that SSI Ltd was insolvent from February 1996 and that Jupe's director's drawings was a significant factor. By 28th February 1996 Jupe's drawings totalled £103,000 and these rose to a total of £155,000 over the rest of 1996. There was also substantial expenditure on advertising. During 1995 this had amounted to £242,000 and Fisher had hoped that this would be reduced. However, this was not to be the case as £214,000 was spent during the next six month period. Jupe strongly denied that SSI ltd was ever insolvent before the withdrawal of credit card facilities and the start of the DTI investigation on November 4th 1996. Although the prosecution cited a long list of outstanding bills, some for quite trifling amounts, Jupe maintained that SSI Ltd had sufficient cash to meet its commitments and was managing its debts and deferring payments as necessary - something any business does. One debtor, Brook Street Bureau, took out a county court summons against the company. Jupe said he did not understand by Ms Sancar, the firm's accountant did not pay bills in full. Thompson suggested that this was because she knew that a big bill was owing to Speyside and that if smaller creditors were paid in full the company would be overdrawn.

On 21st November 1996 Fisher advised that SSI Ltd should cease trading as soon as possible as the figures to 30th September 1996 showed that the company was insolvent. Jupe said that this was a mistake and that Fisher should have looked at the figures for October. "Mr Fisher's approach is one that I failed to understand - to a large degree he was protecting his own position."
The prosecution suggested that SSI Ltd could not source Champagne for its customers as it did not have the funds to pay for it.

SFO briefing against Marshall Wineries

Jupe claimed that the Investors Chronicle had been briefed by the SFO (Serious Fraud Squad) against Marshall Wineries. Pressed on this point by Thompson Jupe conceded that the SFO was not mentioned in the article.

The business degree

Jupe, while under detailed cross-examination over creditors of SSI Ltd, claimed that he had a degree in business. His Honour Judge Stewart remarked that Jupe hadn't mentioned this before and asked when he had graduated. "Last year," was Jupe's reply.

Jupe's evidence is due to be concluded on Monday when he answers a number of questions from the jury as well as any further points from his defence counsel. Then any further defence witnesses will be called before closing speeches commence. The number of questions asked by the jury may now be over 200 and the jury may be headed for an entry in the Guinness Book of Records.

Illness delays Jupe trial by a week
(Posted 22nd March 2004)

Due to the illness of two jurors, the Jupe trial was postponed for a week. It will recommence on Monday 22nd even if one or two of the jurors has to be discharged. It became clear on Wednesday (17th) that the two jurors, who were ill on Monday, were not able to continue as hoped on Wednesday. His Honour Judge Stewart decided to adjourn proceedings until Monday rather than discharge the two ill jurors and continue the trial on Wednesday. He did acknowledge that the ten-day gap in his cross-examination by the prosecution placed a considerable strain on the defendant, Stephen Jupe.

The delay caused some muttering between my learned counsels about the curse of Southwark Crown Court and the apparently notorious air-conditioning system.

Stephen Jupe's trial
(Posted 15th March 2004)

Charges: Three counts of fraudulent trading and one of using a prohibited company name

Before: His Honour Judge Stewart
Jury selection: 2nd February. Case started: 3rd February

At Southwark Crown Court - Court 6
Normal hours of sitting: 9.30am - 1.30pm Monday to Friday

"Identified potential suppliers" (April 1993)
"Two entities within one system which would include Speyside"
Whisky cartel collusion between the main players

Overview

Stephen Jupe has spent the last week (from 8th March) in the witness box. He is the first defence witness to be called. For much of the week Jupe was questioned by his defence barrister, Michael Hopmeier. Then for the last hour and half in court on Thursday 11th (the case was not heard on Friday), the prosecution led by Collingwood Thompson started their cross-examination of Jupe.

Since the last investdrinks' report the prosecution's case has been concluded. They called a number of further witnesses. These included various expert witnesses, especially whisky distillers and brokers. The following brokers were called: Alan Lundie of William Lundie & Co. Ltd. Glasgow, Neil Clapperton of Cadenheads, Edinburgh, John Grant of Glenfarclas Distillery Banffshire, and Margaret Lombard-Chibnall of Lombard Whisky Brokers on the Isle of Man. John Grant had been approached by Marshall Wineries in July 1993 but declined to supply them whisky for investment purposes.

Also called were Paul Smith of the Malt Whisky Buyers Helpline, set up to help investors in various drinks' investment schemes, and Mark Reynier of La Reserve and now the Bruichladdich Distillery on Islay. It was Reynier, who first offered in the early 1990s casks of Springbank as an alternative investment. Andrew Jefford, who on 7th November 1995 wrote the first critical newspaper article about whisky investment for the Evening Standard , was another expert witness. (Andrew Jefford's article can be accessed on www.dcs.ed.ac.uk/home/jhb/whisky/swa/cask2.html) Jefford also put together a television programme on whisky investment that was shown in March 1996. The programme included an interview with Jupe. Unfortunately investdrinks was unable to attend these court sessions, so cannot for the moment give more detail.

During lengthy questioning by Hopmeier, Jupe maintained that Marshall Wineries was a viable business and that his clients' should still be able to sell their whisky casks for a profit. The business had been hit by adverse press comment that had started in November 1995 with Jefford's article in the Evening Standard . Jupe said that "Jefford's complaint was inaccurate and unfair".

Asked about Marshall Wineries and Grandtully, Jupe explained that they were "two entities within one system which would include the Speyside Distillery". Although Grandtully had no distillery or distilling equipment "it had caused this whisky to be distilled".

When Andrew Jefford said that Marshall Wineries and Grandtully were one and the same this showed "how fallacious Jefford's view of the whisky industry is", said Jupe. Asked about selling Grandtully, an unproven product, at the same price as Springbank Jupe claimed that "Grandtully was a lot more commercially viable than Springbank. Springbank was not well known. It had a following. I didn't want to compromise Springbank by undercutting it - hurting an independent distillery." He claimed that the offer was pitched at a level that would allow clients of Marshall Wineries to make a return on their investment. By 1996 Speyside single malt had done well in blind tastings claimed Jupe.

Marshall Wineries was set up by Jupe, Lewis Daulby and Len Bayliss. Daulby resigned as a director in January 1994 and Bayliss left the company in June 1994. There was a dispute between Bayliss and Jupe over shares that went to a court case in 1997, which Jupe lost. The following year Bayliss petitioned successfully for Jupe to be declared personally bankrupt. Bayliss is now dead.

Jupe explained that the immediate cause of the business' failure was the double blow on November 4th 1996 when Barclaycard withdrew their credit card facilities and the DTI started their investigation of Marshall Wineries. Jupe denied that Marshall Wineries was insolvent in August 1995. "The company had a great future," he said. "Had we been able to replace the Barclaycard credit facility, the company would definitely have survived."

Jupe claimed that the Scotch whisky industry operated an illegal cartel to discourage new companies entering the market, so eliminating competition. New companies, he maintained, would bring "new technologies, new innovations and new competition".

Jupe admitted that he had never invested in whisky himself nor suggested to family and friends that they should so. "I invested in the company rather than whisky," he said. Nor had he ever tasted the 10 YO Speyside.

Asked by Hopmeier whether his intentions had been dishonesty. Jupe replied "It was not the intention either then or now." 'There were no dishonest claims. With hindsight we delivered our promises at five years. I'm proud of what we accomplished and investors could still make a return by selling their casks. " He said that he had "lost everything". Jupe described himself as a "professional salesman".

Jupe explained that he set up a new company Marshall Wineries Ltd, which was incorporated on 6th November 1996, to protect the name Marshall Wineries. His accountants had not told him that he could not use the name of a bankrupt company (Securitised Syndicated Investments (SSI) Ltd trading as Marshall Wineries went into liquidation 12th December 1996). Nor had they commented when registering the new company for VAT on 19th November 1996. The application was submitted before Marshall Wineries went into liquidation.

The jury has already asked nearly 200 questions, which is virtually unprecedented. One juror wanted to know the percentage of starch in a grain of barley. On several occasions the number of questions asked by the jury has led Hopmeier to remark that "I cannot be asking the right questions". The 40 questions that had accumulated during the defence's questioning of Jupe were put to him before the prosecution started to cross-examine him.

Collingwood Thompson started his questioning of Jupe by looking in detail at statements made by Marshall Wineries in their brochures and letters to customers. He alleged that a number of these were lies and deliberately intended to mislead investors.

Jupe claimed that he "did not deliberately mislead investors" and that he 'behaved with total integrity throughout 1993 to 1997". Thompson asked whether 'innovation' meant selling casks of whisky at vastly inflated prices. Jupe maintained that he "had made a market in Grandtully" and wanted to build the brand. Why hadn't Grandtully featured in Marshall's literature? "I didn't think it was necessary,' Jupe replied.

Asked about the claims of made about their expertise in whisky, Jupe explained that the expertise came from their dealings with the Speyside Distillery - "which was part of the same system - the three companies". These were "aspirational statements". Jupe did concede that some of the statements in the 1994 brochure were "inaccurate or not completely accurate". The claims of expertise became more accurate "through its (Marshall's) life". Jupe conceded that he had "no professional expertise" in whisky.

Jupe agreed that Marshall's claim that the supply of the casks to celebrate the 500 years was strictly limited as not true. "It was to give investors an imperative to buy but was not dishonest." Jupe was pressed over mention of a 'distillery manager' in a letter sent to an investor in July 1993. Although there was no distillery "Grandtully delegated tasks to the Speyside Distillery". Jupe maintained that "Grandtully did produce single malt whisky".

Thompson asked Jupe about Marshall's first brochure that was sent out in April 1993 and a letter that was sent to an investor on 12th May 1993 that advised the investor that a cask was available and was held for him. "As Marshall's first contact with any whisky suppliers was not until 12th July 1993 and the first order placed with Speyside at the end of August 1993, what whisky was in that cask?" asked Thompson. "We had identified potential suppliers," said Jupe "It was going to be Grandtully." Thompson pointed out that Grandtully Distillery Ltd was not formed until July 1993 and that the free sample offered in the April brochure was called Marshall Wineries 15 YO.

Jupe thought that Marshall's would have contacted Speyside before July. "We were aware of Speyside." Jupe said that it was "his counsel's omission" that they had not challenged the date of the first meeting with Speyside. "You were taking money with no source of supply?" said Thompson. "We had identified potential suppliers, made sure of availability and were conducting a process of selection," maintained Jupe. "In April 1993 you had no source of supply. Are you a clairvoyant?" demanded Thompson.

Jupe's cross-examination continues on Monday.

Lighter moments:

When talking about the rum that Marshall Wineries bought Jupe inadvertently described Ricky Christie as "a rum merchant". This caused one of the juror's to explode with laughter and then turn puce as he tried to contain himself.

The trial is not expected to finish before the end of this month.

"Significant but not critical" Jupe trial continues
(Posted 16th February 2004)

After a succession of Marshall's investors in the first week of the trial the court has heard from a several ex-employees and from Ricky Christie, ex-director of the Speyside Distillery Company Ltd, who supplied Grandtully with the casks of new fill whisky.

Speyside and Christie were first contacted by Leonard Baylis of Marshall Wineries in the summer of 1993 about the possibility of Speyside supplying single malt whisky which Marshall would be selling to their client base. The initial contact led to a meeting on 12th July 1993 between Ricky Christie and McSharry, md of the Speyside Bonding Company, and Baylis and Lewis Daulby representing Marshall Wineries. The whisky would be bought by the Grandtully Distillery Ltd. "I'd never heard of the Grandtully Distillery," said Christie. "I assumed that the name had been chosen to give credibility to the venture - a traditional Scottish background with the company based in Scotland." In any case the whisky could not have been sold under the Speyside Distillery name as this would have contravened Speyside's copyright.

Following discussions Speyside quoted, in early August, a series of prices for new fill. For up to 10,000 litres the price was £2, up to 25,000 it was £1.92, then to 50,000 - £1.85 and up to 100,000 - £1.80 and over 100,000 - £1.75. Soon an agreement was drawn up between Grandtully and Speyside and signed by Christie and Jupe. Among the various conditions Speyside agreed not to enter into a similar arrangement with any other company and that payment would be within 45 days. It was also clear that the whisky was for investment. The agreement was due to last a year. A more formal contract was discussed the following year but it was never signed. Nevertheless Speyside continued to supply Grandtully.

The business was attractive to Speyside because it would help to off set the expense of setting up the Speyside Distillery, four miles from Kingussie and on the west side of the River Spey in 1990. At this time the company was selling between 500,000 to 600,000 litres of whisky a year with Grandtully taking between 100,000 - 150,000 litres. Christie said that Marshall Wineries was "a significant part of their business but not critical". Christie detailed that business between Speyside and Marshall's went reasonably smoothly until the financial problems that built up in 1996, although there were difficulties when he discovered that Marshall's were using pictures of the Speyside Distillery in their publicity. Christie said that he spoke to Jupe about this as well as warning him that he was potentially misleading investors with the claim that a compound annual increase of 18% was possible in a market that has been static for a number of years. "The whisky loch is well known," he added. Jupe reaction was "very off-hand".

During the latter half of 1996 payment problems grew and by February 1997 Grandtully owed Speyside over £100,000. In November 1996 Speyside proposed that the debt could be managed by off-setting future rent due from Grandtully. The debt could be paid off over four years. This would have meant that customers, who had already paid in full for casks, would have the title transferred to them. Speyside set one main condition: that they would carry out an audit on the casks to establish that casks in the Speyside Bonding Company matched those on the lists from Marshall. To do this, Speyside required the addresses of Marshall's customers. This was not supplied and the deferment proposal was never agreed. In late February 1997 Speyside took a lien over the casks that had never been paid for.

Only within the last 24 months has Speyside received the list of Marshall's customers' addresses from the Official Receiver. On two occasions and in exceptional circumstances have Speyside bought back casks from Marshall's customers at the price they paid for them. Asked by Thompson what the chances of all the investors being paid back at the original price. "Not a snowball's chance in hell."

Cross-examined by Michael Hopmeier, Christie agreed that it was common practice for whisky companies to use their own brand names for single malts they brought in. However, they would not claim that the whisky had been distilled at their own distillery. The complimentary bottle of 17YO Grandtully sent out to investors came from a 'very good distillery' close to Speyside and was supposed to give "a reasonable representation of what the new fill Grandtully would taste like once it was mature". Presumably for commercial reasons Christie declined to disclose the name of the distillery. Dalwhinnie is a possibility as it is probably the closest distillery to Speyside.

In 1996 Speyside also supplied William Buchanan with casks. However, Christie had had no dealings with this company. Speyside also marketed casks of whisky to the public through their internet site and charged a similar price to Marshall Wineries.

Ann English, who had a part-time clerical job at Marshall's for 18 months until she left in March 1996, described how the company grew and took on more staff. The company was successful and Jupe was making a lot of money. He was generous to staff he liked and was very involved with the church, to whom he gave large donations. Following TV programme where Andrew Jefford exposed the company, English decided it was time to leave as Jupe blamed her for not sending the customary disclaimer out to Jefford when he bought a cask. English was completely unaware of this disclaimer. "I don't ever remember sending this out," she said.

Brian August, formerly senior manager for operational risk and security with Barclaycard Services, reported that Barclaycard had repaid 138 customers, who had paid for their whisky in whole or in part with a credit card, £285,982.60. On the 4th November 1996 Barclaycard informed Marshall Wineries that they were terminating their credit card facility. Following adverse publicity, Barclaycard had made a company decision to withdraw credit card facilities to companies selling Champagne and whisky as investment commodities. When Barclaycard refunded their customers, the title of the whisky passed to them. However, Barclaycard found it very difficult to sell the whisky. They received offers of £700 for a sherry butt and £400 for a hogshead.

The court also heard that in early 1995 Jupe and his partner Debra bought a three-floor Victorian family house in Roehampton for £140,000. The house needed substantial work done it. The original estimate was £68,112 to a fairly basic specification. As work progressed the specification increased "on a day to day basis" with, for instance, top quality kitchen and designer bathroom fitments ordered. The final bill came to £140,899. Invoices were to be paid by Marshall Wineries. When in 1996 Jupe was interviewed on television it soon became clear to the surveyor and the builders that Jupe had run out of money. They decided to complete the work, so that the house could be sold. In June 1997 it was sold for £270,000. In all Marshall Wineries paid £102.681 towards the renovations.

Jupe's fraud trial opens
(Posted 9th February 2004)

The trial of 50 year-old Stephen Jupe on three counts of fraudulent trading and one of using a prohibited company name opened at Southwark Crown Court on 2nd February. The public were misled into making investments in casks of whisky, flagons of rum and vintage according Colingwood Thompson QC, barrister for the Crown.

Jupe set up SSI Ltd, trading as Marshall Wineries, in August 1993 and the company operated from 218 Garratt Lane, Wandsworth in south London. The chief business of the company was selling casks of whisky as an investment. Customers were recruited by glossy flyers and adverts in investment magazines as well as papers like the Sunday Times . Claims such as 'the price of whisky is unrelated to economic conditions' and 'there are compelling financial reasons that make whisky a very lucrative investment' persuaded some to buy. Marshall Wineries claimed to have worked previously in the commercial whisky sector and to have professional expertise and knowledge. They sold hogsheads at £950 and sherry butts at £1750. The company also sold flagons of Navy rum, which apparently originated from Leningrad, and, with the approach of the millennium, vintage Champagne - mainly Trouillard but also Taittinger

Investors, who bought whisky casks, found they had apparently acquired Grandtully Single Malt Whisky made by the Edinburgh based Grandtully Distillery Ltd, another of Jupe's company directorships. Grandtully Ltd was registered at 3 Hill Street, Edinburgh and traded from 45 Frederick Street, where a girl answered the phone at an unstaffed office. In fact the whisky was distilled by the Speyside Distillery Company near Kinguisse in the Spey Valley. At the end of 1994 existing customers of Marshall Wineries received a letter telling them that Grandtully Distillery Ltd had without reservation declared the whole of its 1993 production to be premium.

Between August 1993 and 12th December 1996, when the company went into voluntary liquidation, Marshall Wineries' turnover was in excess of £4 million. However by autumn 1996 the company was in serious financial difficulties and on November 4th their Barclaycard facility was withdrawn and the DTI started an investigation. Two days later Jupe set up a new company, Marshall Wineries Ltd. "Utterly dishonest and devious," said Thompson. "This was Jupe stepping away from the wreckage." The Crown alleges that money due to SSI Ltd was diverted into Marshall Wineries Ltd. Several witnesses, who bought in late 1996, testified that they had never received their casks although they did receive certificates. Their names were placed on a sherry butt pending register. Unfortunately, as the Speyside Distillery Ltd was owed some £100,000 by SSI Ltd and, as this debt was not resolved, Speyside seized back a number of the casks. In May 1997 the phoenix company, Marshall Wineries Ltd, ceased to trade.

James Nicholls, an investor who also bought ten cases of Trouillard Champagne in late 1996 for £3,800, never received them. Nichols had a meeting with Jupe at Marshall's offices in Garratt Lane on 17th January 1997 where he demanded to know where his whisky and Champagne was. Nicholls said that Jupe explained that he had over-advertised and he had been let down by the media, who had made adverse comments about the business. Nicholls described Jupe's attitude as "not very good" and "very arrogant". There was a suggestion that they should put on boxing gloves. Jupe asked Nicholls to leave several times but Nicholls and his wife refused wanting a 'forthright explanation'. Later things calmed down and Jupe promised to deliver 8.5 cases of Champagne in the near future to Nicholls' home address. Jupe also gave Nicholls a bottle of old Port as it was his 50th birthday in four days time. On leaving Nicolls said to his wife, "We will never see that Champagne". Mr Nicholls is still waiting for the delivery.

Investors, who dealt with Jupe and Marshall Wineries, in December 1996 and 1997, were unaware that Marshall Wineries (aka SSI Ltd) had gone into receivership in December and that they were dealing with a separate company called Marshall Wineries Ltd.

On the 5th and 6th February Southwark Crown Court heard from a number of investors with Marshall Wineries. None of them, who purchased barrels of whisky, had made a profit or had been able to sell their casks. Several found that they had paid over the odds for their whisky, having assumed that Marshall Wineries would be selling at the current market price. Those, who had paid by credit card, did receive their money back from the credit card company. Some, who bought flagons of rum, had more success. One investor made a profit of £1,000 on 10 flagons of rum that he bought from Marshall's for £120 a flagon. However, he lost £500 on ten cases of Taittinger.

The trial before His Honour Judge Stewart is expected to last for up to three months.

Lighter moments

A literal response
Following questions about a visit on 17th January 1997 to the offices of Marshall Wineries where he met Stephen Jupe, James Nichols was asked by Thompson.
"Did you go back to Saudi Arabia after this?"
"No, I went shopping with my wife."

How you can tell a company is not Scottish run

Julian Thomas, a retired bookseller, who bought two sherry butts in December 1996, didn't receive the two promised sample bottles before the New Year. "I knew the company wasn't run by a Scotsman, they'd have seen I had something to see in the New Year." Thomas, who paid out £3,600 on two sherry butts on 16th December 1996, and received only a certificate and eventually a sample bottle said. "It was awful whisky - not as smooth as I had hoped but I drank it anyway,"

Major responsibility

The defence's second string barrister, John Whitfield, has been put in charge of the bottle of 17 YO Grandtully brought in by witness, Bridget Bowater. It will be a heavy responsibility as the 17YO is the only thing, apart for a certificate of title for a hogshead of whisky that Bowater purchased from Marshall Wineries in December 1996, she received ever from the company. "The most expensive bottle I have ever bought," she said forcefully. Judge Stewart declined to take any responsibility for the bottle's safe keeping.

Jupe trial postponed
(Posted 19th January 2004)

The trial of Stephen Jupe, a director of whisky investment company Marshall Wineries, has been postponed until Monday February 2nd. It had been due to start on 5th January 2004 at London's Southwark Crown Court but this was put back to 19th January.

 

Watch out Belgium
Vintage Wines target Belgian investors
(Posted 25th November 2003)

Previously the elusive Dutch based Vintage Wines appear to have preferred to largely concentrate on fleecing Irish investors. Now investdrinks has learnt they are now also turning their attention to Belgium (see recently received email below. Vintage Wines have made a speciality of selling lesser-known Bordeaux wines worth around £100-£150 a case for extraordinarily high prices - £2000 and more. A number of disillusioned Irish investors have then found Vintage Wines extremely difficult to contact.

'Today, I received a letter from a certain "Mike Chapel", manager of Vintage Wines Ltd., offering some investment opportunity promising a yearly return of 23 to 152% ("depending on the results") when investing in Bordeaux wines. They offered a "Dom Perrignon 1990" (sic 2x) as well for the first 200 victims (my interpretation) to return the accompanying form. (Someone serious with wine should know that the correct spelling for the famous Champagne is "Dom Pérignon".)

The only address mentioned is a PO box: "B.P.3; La Poste; 1070 Anderlecht Erasme; Belgium".'

With the letter was a pre-paid reply card to the Anderlecht address above. The idea that anyone is going to make between 23% - 152% a year annual return on wine investment is preposterous, especially with the prices Vintage Wine Ltd charge. Anyone, who receives a letter from Vintage Wines Ltd, should tear it up and put it in the bin or take it to the local police.

Allwines: no action over £3 million deficit
(Posted 3rd November 2003)

Liquidators, Deloitte & Touche, are close to winding up Allwines Ltd, which sold wine as an investment and went bust in April 2001 with a deficiency of around £3 million. Around £60,000 has been realised from sales of wine, so there is a huge discrepancy between this and claims from approximately 200 investors for more than £3.3 million. The company's directors are David Allan and his wife, who is understood to have played no actual part in the business. There will be no pay out to creditors as all monies have been used up in liquidation and legal fees.

It seems highly likely that some of the wine sold by Allwines was not bought (or the same wine was sold to more than one client) and some was subsequently sold with out investors' authorisation. Although Deloitte & Touche submitted a report to the DTI following their investigations into the directors' conduct, no action appears to have been taken nor has there been any police investigation.

"My portfolio was valued by David Allan at £80,000," one irate investor told investdrinks . "It included Mouton 1982 and 1986. All I have had back are 12 virtually worthless bottles. I thought David was a friend. I had lunch with him on a number of occasions and was once invited to the opera. Allan and his family had a flat in Barons Court (London), a house in Hove and property overseas. His wife lived in Hove and took no part in the business. They have now sold the house in Hove and have moved to Dorset."

It now seems clear that no action will be taken against David Allan unless a number of investors club together and go after his assets.

Allwines is one of the very few wine investment scams that involved someone from within the wine trade. Most of the other scams have been run by people from the more exotic reaches of the financial services world.

Champagne scamster returns for £3 million art hit

Ashley Jenkins Ltd, an art investment firm put into provisional liquidation on public interest grounds on 2nd October 2003, was run by Alistair Stuart Miller. He worked for Hamilton Spirit Management, a fraudulent whisky investment company based in Gibraltar, before setting up Berkley Champagne Supplies Ltd on the Isle of Dogs in April 1996. The company was wound up in the public interest in February 1997 and only bought a fraction of the £1.3 million of 'Champagne investments' they sold. The company was investigated by the SFO but no charges were made. In July 1999 Miller was barred from being a UK director until 2011.

Ashley Jenkins Ltd was set up in March 2000 with Miller's wife, Mercedes Carbo, as the sole director. It is clear Carbo was a figurehead and that Miller ran the company using the alias, David Newman. The company's registered office was 72 New Bond Street, London W1, a well-known accommodation address. It is thought that investors were persuaded to part with around £3 million on works by 'up and coming' artists. The selling was done through Ashley Jenkins SL, an associate company, based in Seville, Spain. The whereabouts of the paintings is currently unknown but, in any case, they are likely to be worth much less than investors paid for them. The winding up petition will be heard in the High Court on 14th January 2004.

Le Monde du Vin/ LMDV Ltd (formerly Glennstewart International Ltd)
(Posted 22nd October 2003)

Antony Evans can be contacted on 49 (0)30 -28 09 59 59 or info@le-monde-du-vin.com Le Monde du Vin's website (le-monde-du-vin.com ) is currently advertising that it has 'Whisky & Champagne Auctions running now. We are happy to announce the first set of our Whisky & Champagne auctions. See what items are online at the moment!' However, there may be a gremlin at work as there are no whiskies or Chmapagnes listed for auction. The site also advertises a whisky event for the 7th and 8th February 2004 at the Tegeler Seeterrassen near the bay on the Tegel Sea in North-Western Berlin. Evans' Single Barrel Collection and Le Monde du Vin will be among the exhibitors.

Although the website gives the address of Le Monde du Vin as Torstrasse 147, 10119 Berlin-Mitte, neither Evans nor Le Monde du Vin are currently listed at this address in the German telephone directory. However, there is an Antony Evans listed at Chausseestr 35, 10115 Berlin with the same phone number (0)30 -28 09 59 59 as given for Le Monde du Vin.

Evans has told investdrinks that due to computer problems all company financial data was lost and so it has been impossible to file the accounts in 2002. Happily 90% of the data has now been re-entered, so doubtless the 2001 accounts due on 30.6.02 will soon be with Companies House.

Vintage Wines - the fraud continues

investdrinks received recently an email from an aggrieved investor with Vintage Wines.

'Thanks very much for your e-mail. I can't seem to get through to Vintage Wines anymore and I'm getting a bit concerned. Is there any other way of getting through to them or to a fraud authority or something? Should I ring the Dutch number you have on the website?

As for the history of this, I originally got an ad for the company in a letter from my bank, Bank of Ireland around September/October 2000. Being curious and given that it came with a Bank of Ireland letter, I filled out the form for more details.

On the 17th of October, I got an information pack about Vintage Wines, detailing what a good deal wine investment is etc. with stats of previous wines and how much they had made - everything looked impressive.

Then, a few weeks later I get a call from a consultant named John Green, offering to sell a case of Chateau Domaine de Peyrelongue Saint-Emilion Grand Cru 1994 for IR£905. On the 2nd of August 2001, I was offered a case of Chateau Paveil De Luze Margaux Grand Cru 1994 for IR£3,080. And on the 12th of March, I was offered Chateau Mauvexin Saint-Emilion Grand Cru 1994 for ¤3,500 per case.

I accepted these 3 sales and was offered others but turned them down. I was informed by Vintage Wines that the wine would be stored a customs warehouse in Kaai 373, Zwarte Weg 60, 2030 Antwerpen, Belgium. I later got a letter confirming this from Davison Newman & Co. Ltd of 142 Temple Chambers, 3-7 Temple Avenue, London and that the wines were being moved from Freightflow International Ltd. to the same address in Antwerp but also included that the warehouse was wine Logistics International at Wijnnatie, Douaneagentuur Nv in Kaai 373 etc.

I spoke mainly to a guy called John Green about the sales and the following appeared on the letters I was sent: Ann van Note, John Marshall, Kirsten Langley and J Banks.

Their address was Prinsengracht 64 1015 DX, Amsterdam, Netherlands but this seems to have changed to Herengracht 265, 1016 bG, Amsterdam, Netherlands along with the headed paper. Phone and fax numbers (+31 20 520 5429 and +31 20 620 8355) have remained the same though but nobody seems to ever answer except for the voicemail. I was also given a "direct number" to John Green on +353 20 520 3702 but this is voicemail also.

I've rang dozens of times and written several letters to both addresses but to no avail. I'm not sure what way to approach this. I would be very grateful for any advice or help you can offer.'

investdrinks ' advice is that this investor should contact the Irish police, even though the Irish authorities appear to have shown no interested in pursuing Vintage Wines. This is in spite of a number of articles in the Irish press, most notably the Sunday Tribune. investdrinks can only assume that the Irish authorities are happy to see fellow citizens fleeced. Clients of Vintage Wines should also contact the Dutch Financial Authorities and the Amsterdam police.

Comic correspondence: Bordeaux Advisory BV

On 1st September 2003 investdrinks received a letter (addressed to a W.H. Budd) from a DR Mr F.Henry Brookman of Brookman, Geradits & Geuljans, juristen in Amsterdam, who represent Bordeaux Advisory BV whose managing director is John Taylor. Brookman objected to investdrinks quoting in its brief entirety Bortdeaux Advisory's website. This was immediately dealt with and investdrinks asked Bordeaux Advisory a number of questions. To date no answers have been received apart from a further letter from Henry Brookman, again addressed to the unknown W.H Budd. Since Bordeaux Advisory sells grossly over-priced minor Bordeaux wines, it is surprising that they appear unable to afford a competent lawyer.

The questions that investdrinks asked John Taylor of Bordeaux Advisory in September.

  1. What evidence does your client have that that it is possible to make a profit of 40% in 12-14 months on 1999 Château le Bassonnerie if it is sold at 2080,00 Euros a case? Furthermore what evidence does your client have that minor or lesser known wines from Pomerol and St Emilion increase significantly in value?
  2. In a recent interview John Taylor says that the company the services of a number of wine consultants and experts both in Holland and internationally. Who are these experts?
  3. In an interview with Belegger.nl John Taylor claimed that investing in wine has produced an average annual increase of 28.6% across the traditional wine market. investdrinks asked upon what that claim was based and how he defined the traditional wine market.

Bordeaux Advisory BV are now punting their dubious and over-priced wine investments to the Dutch. Some journalists have been taken, while others such as planet.nl have not. See - planet.nl

Mirror - a true reflection?
(Posted 29th August 2003)

On August 20th the Mirror published an article by Kevan Reilly on wine investment claiming that 'investors were dumping shares for wine'. Reilly made some sound points - warning that it's not a market for a quick return, of rogue firms that have ripped people off in the past and to seek advice. There were, however, some decidedly misleading statistics, and just one wine investment company was cited: Morgan Aston Ford. The article is online at their site here.

Questionable Stats

"If you pick the right vintage and have enough spare cash, the returns can be phenomenal. Certain Bordeaux wines bought in 1983 for £250 to £300 a case are now worth between £18,000 and £19,000."

investdrinks is assuming that Reilly is referring here to one wine - the legendary Le Pin 1982. Le Pin is a tiny two hectare property in Pomerol, close to Pétrus, that shot to stardom in the late 1980s and early 1990s following the 1982 vintage. Around 500-600 cases are made a year. It is true that Le Pin 1982 has risen phenomenally in price and is now around £25,000 a case, if you can find one. Le Pin 1982 is atypical - the chances of having bought it in 1983 are similar to finding an old master in your local junk shop.

"Between 1995 and 2000 the value of the top 600 Bordeaux wines rose by 300 per cent."

A curious statistic that is frequently quoted. The originally source appears to be FT Money in October 2001. It is not clear on what it is based. investdrinks does not know of any index that covers the top 600 Bordeaux wines - however that is defined. Decanter's Bordeaux Index covers only 64 of Bordeaux's top wines and is currently based on auction prices from 1961 to 1996. The index was reset to 100 in December 1996 and, nearly seven years later, currently stands at 114.48 - an annual increase of just 2.17%.

"Not all the growth is that spectacular but the value of fine wines has grown between nine per cent and 12 per cent a year since 1994."

A meaningless claim as it is impossible to know on what it is based - which wines, which vintages?

Other doubts:

"You should look for a guaranteed market price, low or no commissions for sales and storage in your name."

Reilly is right to insist that wine should be stored in your name but the other two criteria are more questionable. investdrinks is unclear what he means by a guaranteed market price. Unlike shares, fine wine does not have a fixed market price.

Certainly sellers will want to find a broker that charges a low commission on sales but any company that charges no commission will have to make their profit in other ways.

The only company Reilly mentions is Morgan Aston Ford Ltd. MAF is based Greenwich, was incorporated in January 2002 and charges no commission on sales. It does, however, charge a 25% up-front commission or 'one-off commission' on wines its clients buy. Reilly does not mention this, although the commission is clearly explained on MAF's website (morganastonford.com).

Although a one-off commission may appear initially attractive, investdrinks cannot see why it is in an investor's interest to pay such an up-front commission. Except where a wine rises enormously in price, investors are better off paying a commission (normally around 10%) when the wine is sold and buying the wine at cost price from a broker as the case study below shows:

Case study

It takes a surprisingly large price increase before an investor is better off paying a 25% up-front commission rather than a 10% broking commission when they want to sell. The example takes the same case (cost price £900) bought from MAF and a traditional broker. From MAF the case will cost £1125 (including 25% commission) and £900 from broker. Should the client sell the wine while it is still £900, they will make a loss under both systems but a bigger loss through MAF. The table shows how the difference shifts as the price rises.

Best case scenario:

A wine with a market price of £900 has to rise 155% to £2300 before MAF's 25% one-off commission provides an investor with a better profit than paying a 10% broking commission when selling the wine.

Not included in this calculation is MAF's offer of a year's free storage and insurance (worth £10 a case). If this is factored in the wine will only have to rise to £2,200 before a client is better off with a 25% up-front commission.

‘Market Price’  

MAF

Sale price 10% Broker

Profit/loss: MAF

Profit/loss: broker

Difference

900

1125

810

- 225

- 90

- 135

1400

1400

1260

275

360

- 85

2000

2000

1800

875

900

- 25

2100

2100

1890

975

990

-15

2200

2200

1980

1075

1080

- 5

2300

2300

2070

1175

1170

5

Prices are in £s.

Worst case scenario

Perhaps the biggest drawback to the up-front commission is that it assumes the company is still around when you want to sell your wine investment -- generally a medium to long term hold. Company mortality is a fact of life and should MAF fail for whatever reason, investors will have to find a broker (or auction house) to sell their wine. At a 'market price' of £2300, a broker's commission will reduce the MAF client's profit to £945, meaning that they would have been £225 better off dealing with a broker charging 10% commission on the sale.

Response from Tim Ford, chairman of Morgan Aston Ford Ltd:

'You are of course aware that we place high importance on integrity and transparency in our business. You have discussed this with Bruce Aston before and you recognise this in what you say. You are also well aware that our clients place orders with us in full knowledge of our terms. You may think, on reflection, that those terms are not surprising when in reality the major auction houses charge 25% (10% on sellers and 15% on buyers) and major wine merchants frequently price in an equivalent way. So there is something of a norm.

What we do not do is either procure or sell wine at inflated prices and I trust in your comments you will not convey the impression that we do, or that we are in any other way directly or indirectly associated with or comparable to others who may, or otherwise in any way impugn our integrity.'

"Investors can, if they meet the conditions, avoid capital gains tax on wine because it's regarded as a wasting asset."

The Inland Revenue does not necessarily regard fine wine as a wasting asset. This is clear from a bulletin issued by the Inland Revenue in August 1999 which Morgan Aston Ford helpfully include on their site. Here are two crucial extracts:

'For Capital Gains Tax purposes, a wasting asset is one whose predictable life, from the point of view of the person acquiring it does not exceed 50 years, Section 44(1) TGGA. Whilst this definition would clearly apply to cheap table wine which may turn to vinegar within a relatively short period, even in unopened bottles, our view is that it would certainly not apply to port and other fortified wines which are generally recognised to have a very long storage life.'

'However, where the facts justify it, we would normally contend that wine is not a wasting asset if it appears to be fine wine which not unusually is kept (or some samples of which are kept) for substantial periods sometimes well in excess of 50 years.'

From this investors must assume that capital gains tax may well be levied on recent good vintages of Bordeaux ie 1996 and 2000 as some samples will surely be kept more than 50 years and will remain drinkable. Older vintages may not be liable to capital gains as investdrinks understands that the 50 years dates from the time that you purchase the wine.

Bottles or cases?

The following extract from the Inland Revenue bulletin raises another issue:
'If a particular wine is not a wasting asset, then any gain accruing on its disposal may nevertheless be exempt where the disposal of the proceeds for that single bottle do not exceed $6000, section 262(1) TGGA. Where, however, a number of bottles are sold to the same person in one or more transactions, then the question might arise as to the whether the bottles themselves constitute a 'set'. If they do, the £6000 limit would apply to the overall sales proceeds rather than the price fetched for any individual bottle, Section 262(4) TGGA. This is a question of fact that would depend on:

a) Whether the bottles are 'similar and complementary' which would require the wine in them to have been produced from the same vineyard in the same vintage year, and
b) Whether the bottles are of greater worth when sold collectively than when sold individually'

As the answer to both of these questions would appear to be yes, investdrinks suggests it would be prudent to assume that the £6,000 limit will apply to the overall sales proceeds. Do get expert tax advice.

Stephen Jupe trial date set: 5th January 2004

The trial of Stephen Jupe, a director of Marshall Wineries Ltd which offered casks of whisky and later Champagne as an investment, is due to start on 5th January 2004 at Southwark Crown Court, London. 49 year old Jupe of Wittering Close, Kingston-upon-Thames, is charged on three counts of fraud plus a breach of company law. Marshall Wineries Ltd was closed in the public interest on petition by the DTI in March 1997.

Corresponding with Mr Evans
Le Monde du Vin (formerly Glennstewart International)
(Posted 18th November 2002)

Since June investdrinks has been having a somewhat intermittent correspondence with Antony Evans of LMDV, formerly Glennstewart International. I have been authorised by a client of LMDV to act on their behalf because they are based in Singapore. Starting in 1996 the client bought various casks of whisky from Glennstewart International. By March 2002 he held five casks of 'Tomatin' distilled in 1988. These casks are stored at The Speyside Bonding Company in Glagow. During 2000 and 2001 he attempted unsuccessfully to get Evans to sell his casks but found it difficult at times to contact Glennstewart. Evans disputes this. In March 2002 Evans sold two of his casks for £3,050. The client would like Evans to sell the rest of the casks but he has declined to do this as he says he now only deals with the Single Barrel Collection of whiskies that are bottled unfiltered at cask strength straight from the barrel. As well as the Tomatin 1988 (Euro38.18 wholesale in Germany) the collection includes Aberlour 1988 (Euro: 34.16), Highland Park 1988 (Euro 37.14) and Macallan 1989 (Euro 38.57).

Evans has shown this collection at various trade fairs including The London International Wine & Spirit Trade Fair in May 2002. In April 2002 the company name was changed to Le Monde du Vin. It now has premises in Berlin.

In June Evans offered to hand bottle one of the remaining casks of Tomatin with the cost of the bottling (£880) being recouped from the sales. The cost of the cask had included machine bottling at cask strength. Evans estimated that the client would end up with around £1,100 profit. This offer was not taken up.

On 14th October Evans contacted the client suggesting that as 'it could possibly take us some time to sell all the bottles from your cask' he might want to join a small syndicate with three other investors who have the identical casks and share in the bottling of a single cask. This time the cost of bottling would be £1,040. The Malt Whisky Buyers' Helpline have recently had an equivalent cask hand bottled for £640. investdrinks has asked LMDV for an explanation for the high cost of bottling. 'Prices go up all the time, why did the SMSW raise its bottling prices? Why do prices vary from one shop to another for exactly the same item?' says Evans. Apparently the cost of bottling also includes: tastings, attendance at international exhibitions and other promotional activities. Evans has also told investdrinks that 'You can if you wish assume business is slow.'

LMDV is seeking listings with specialist shops, department stores and duty free companies. The company's last set of accounts should have been filed on 30th June 2002. 'We will file our accounts when they are ready,' says Evans.

Jupe transferred to Southwark
(Posted 7th August 2002)

The fraud case involving Stephen Jupe has been transferred to Southwark Crown Court, London. Dates for the preliminary hearing and trial have yet to be fixed.

Allwines Ltd - £3.3 million in claims
(Posted 1st July 2002)

In their first formal report Deloitte & Touche, the liquidators of Allwines Ltd, reveal that claims for over £3.3 million have been received in respect of David Allan's Allwines Ltd that went bust last April. Of this around £3.2 million are claims from approximately 200 investors and in excess of £100,000 from trade and other creditors.

Only approximately £72,000 worth of wine in investors' names has been found at the two bonded warehouses used by Allwines. Wine held in the company's name has been sold for £41,775 gross. Although investors believed that insurance for their wines was sorted out by Allwines Ltd, David Allan has not provided the liquidators with details of any specific insurance policy.

The liquidators have sent a report on the directors' conduct to the DTI. It is not known whether the DTI will move to disqualify Allan and his wife. Deloitte & Touche are also believed to have investigated claims made at the creditors' meeting in April 2001 that Allan owns a number of properties overseas. These investigations remain confidential.

Craig Dean to pay £133,692
(Posted 25th June 2002)

(See Trails & Trials.)

Jupe Charged with Fraud
(Posted 17th June 2002)

Stephen Richard Jupe, a director of Marshall Wineries, appeared at Bow Street Magistrates Court on Wednesday 12th June charged on three counts of fraud plus a breach of company law. 49 year old Jupe of Wittering Close, Kingston-upon-Thames, was bailed to appear on July 17th.

Jupe was a director of Securitised Syndicated Investments Ltd that traded as Marshall Wineries, one of the first companies in the 1990s to offer barrels of whisky as an investment. It was founded in August 1993. Marshall Wineries offered casks of Grandtully. The whisky was purchased from the Speyside Distillery Company Ltd.

Marshall Wineries went bust in December 1996 with a deficiency of some £700,000 and was wound up in the public interest on petition of the DTI in March 1997. Jupe was also a director of Marshall Wineries Ltd. He was subsequently disqualified as a director from August 2000 to July 2006.

Following a long investigation by the Serious Fraud Office, Jupe has been charged with intent to defraud customers and creditors of Marshall Wineries; carrying on the business of Marshall Wineries Ltd (a separate business) for a fraudulent purpose; and acting without leave of court as a director of Marshall Wineries Ltd.

David Golden, Jupe's solictor, said that his client will be pleading not guilty. "He emphatically denies any fraudulent conduct. My client was interviewed for two days by the SFO. He co-operated fully and emphatically denied any fraudulent conduct."

Rosser ordered to pay £519,000
(Posted 12/11/01)

Lee Rosser was ordered on 12th November to pay £519,000 following a confiscation order issued for his part in the Cavendish/Hamilton and House of Delacroix frauds. Rosser has 15 months in which to raise this sum from the sale of his assets. If he fails, he faces a further three years in jail after his current eight and half year sentence ends.

Rosser made £5,024,635.75 gross from his frauds with an agreed net of £1.5 million. His realisable assets are two flats in Gibraltar (£210,000), two garages in Wimbledon, south London (£25,000), a villa in Marbella (£250,000), loans made to Steven Plumb and Alistair Miller (£31,000 including interest). The rest is made up of a Cartier watch, a painting of Gibraltar and some memorabilia including some autographs. Plumb and Miller worked for Hamilton Spirit Management before setting up Berkley Champagne Supplied Ltd, which is subject to an ongoing investigation by the SFO.

Judge Laurie ruled that loans made to two joint business ventures (Mercantile Metals and the Montana Golf Club) with William Bright were not realisable. Mercantile Metals was registered in Switzerland and would have been run from Marbella, soliciting investors to put money into metal. Judge Laurie commented that 'this was probably another fraud'.

Rosser claimed that the villa belonged to his girlfriend, Carmen Osorio Guillen. According to Rosser he broke up with Mrs Guillen in January 1999 and feeling "morally obligated" because he had promised to marry her gave her a flat in Monte Paraiso, near Marbella. He didn't transfer the flat into her name for 'tax reasons'. On 15th May 1999 a restraint order was served on Rosser and in July he was arrested in Spain In September 1999, while in prison in Madrid, he gave her power of attorney and she sold the flat buying the villa in Marbella with the proceeds. Guillen visited Rosser in the Madrid prison a number of times and also when he was on bail in England, bringing over his personal belongings. "Anyone who believes this account must be exorbitantly credulous," said Judge Laurie. The relationship had continued and the transfer was just a device for Guillen to keep some of the proceeds for Rosser until his release.

Police Investigate Helmsley UK

investdrinks understands that Warwickshire Police have started an investigation into the activities of Helmsley UK. Anyone who had dealings with this company is urged to contact Warwickshire Police.

Dean up to his old tricks while on bail for Delacroix trial?
(Posted 15/10/01)

'Call the police over dodgy cognac deal' advised Tony Hetherington in the Mail on Sunday (30th September 2001). Hetherington reported how an investor had been persuaded to buy 100 litres of Helmsley VSOP Grande Champagne Cognac for £3,800 in October 2001 with a purchase offer that Helmsley UK Ltd would buy the 100 litres back for £4,500 on 1st April 2001. investdrinks is not at all surprised to learn that the investor has not received their money nor had any explanation.

Thus contrary to assertions supplied to investdrinks by Dean's solicitors, Charles Russell, the fraudster continued to offer Cognac in bulk but in a quantity (100 litres) that could not be easily identified. At the Delacroix trial Dean's defence portrayed Helmsley as a legitimate business suffering unfairly from the repercussions of the Delacroix trial. This was always questionable, this fresh evidence increases the doubts about the legitimacy of the whole Helmsley operation.

The Mail on Sunday article concluded thus:

'Did your cash actually buy any Cognac? Was there a genuine forward contract to resell it, giving you a profit? These are questions for the police. Call them at once.

investdrinks agrees and trusts that the police will investigate thoroughly, both Helmsley UK Ltd and the Helmsley operations in Madeira and Brussels, and that charges will be brought if there is evidence of fraud.

On 31st July 2001 Craig Dean was declared personally bankrupt at Birmingham County Court.

Message to Vintage Wine investors
(Posted 17/09/01)

Message from Matt Byrne:

"Irish investors who invested in 'Vintage Wines, Holland'. We feel that this operation is a scam and are trying to get our money that we invested back. I believe that we have more of a chance if we do this together, so, if you would like to contact me, my phone number is 00 353 (0) 503 21405 or 087 7975286 (after noon) or e-mail mattb@gofree.indigo.ie. We have being told that Eircom share holders may have being targeted also. Please let me know of your dealings with Vintage Wines. We intend to organise a meeting to discuss our options."

Fraud netted £10 million
(posted 3/9/01)

After months of legal argument the amount each of the fraudsters (Blee, Daulby, Dean and Rosser made from the Cavendish/ Hamilton Spirit Management whisky and the House of Delacroix millennium Champagne investment frauds was agreed at Southwark Crown Court on 29th August. Lee Rosser's share from Cavendish/Hamilton was £3.2 million with £144,000 for Julian Blee. Lewis Daulby's share of £3.7 million was agreed sometime ago and the Crown has accepted that he has no assets left.

The House of Delacroix scam netted Blee and Rosser £1,208,192.10 each, with £557,590.32 for Craig Dean. It was accepted that Dean's benefit would represent the Delacroix takings between 31st March 1997 to 31st August 1997. Dean ran the company during this period. The four fraudsters made a total of just over £10 million.

The final stage of the confiscation process will be in early November when the court decides how much each of the three remaining fraudsters is in a position to repay. This may only be a fraction of the figures agreed: Dean has recently been declared personally bankrupt. World-wide investigations by the SFO are continuing

Letter from Helmsley House, Brussels, launching Helmsley UK Ltd
(posted 20/8/01)

Clients of Helmsley, Craig Dean's creation, received the following letter in September 1999. A copy has recently been sent to investdrinks and it is worth printing in full. Although far from amusing for those unfortunate enough to have invested in Cognac through Helmsley, it is remarkable for its brazen cheek and anyone who saw Dean's swaggering performance during his trial at Southwark Crown Court will not be surprised.

To fully appreciate Dean's cheek you have to remember that when he wrote this letter to concerned clients of Helmsley, he had already been extradited from Portugal, his business in Madeira closed by the Portuguese authorities, been remanded in Bow Street Magistrates Court (16th July 1999) on charges of conspiracy to defraud, had his passport confiscated and was on strict bail conditions. Subsequently, of course, he was found guilty of fraud in the Delacroix trial earlier this year and is currently serving three years inside.

06/09/99

Dear Sir/Madam,

Please accept my sincere apologies for Helmsleys (sic) recent lack of contact with you, which was precipitated by circumstances beyond my control. However I am now able to write to you as a valued client of The Helmsley Group, to inform and update you on recent events, the groups (sic) current position, and future plans.

I am sure that you are probably aware that since opening Helmsley, the company and I have been continually misrepresented and misinterpreted by a number of regulatory bodies and certain sections of the press. Even the unprecedented offer by Helmsley to assist clients of companies (presumably the Coubert Group - investdrinks) now closed, the future disposal of stocks purchased from those companies, in a clear, honest and mutually beneficial manner, has failed to convince some quarters of our honesty and legitimacy.

However despite this unwarranted attention, I have made every effort to continue my business in a proper and dignified manner, whilst challenging all accusations through the courts.

Subsequently though, despite my vociferous and vigorous defence of the company and myself, the activities of Helmsley were unavoidably affected during this most difficult time.

In particular, these external events have caused Helmsley to endure:

Cancellations of agreed and contracted business.
A reduction in company income during our first period of expansion in Belgium.
Delays in the delivery of stock or ownership certificates.
The closure of the Madeiran (sic) office.
The closure of our Bruxelles showroom.

However, in spite of these constant interruptions which have understandably forced the company somewhat behind schedule, I believe the actual viability and potential of Helmsley remains as true to today as ever. My determination is limitless, and I will not rest until this project, after all the hard work that has already been given to it, has succeeded.

I am therefore delighted to announce, (as I am currently remaining in the UK to resolve these outstanding issues), the opening of Helmsley (UK) Ltd.

It is from the new premises of Helmsley (UK) Ltd that the tele-sales and tele-marketing campaigns will now be conducted. Retail and Wholesale facilities are also planned, subject of course to the completion of the appropriate UK licensing requirements.

The immediate priorities of Helmsley (UK) Ltd are:

To ensure all outstanding stocks are delivered as quickly as possible, (which I hope to have completed by November 30th 1999).
To bring the Helmsley "special offer" tele-sales campaign to a successful conclusion.
To conduct a customer satisfaction survey, (which is enclosed with this letter).
To open replacement Madeiran premises as quickly as possible.
To open replacement Belgian premises as quickly as possible.
To install a team at Helmsley UK that are not only professional, approachable, and efficient, but also capable of performing their duties without constant supervision from myself. (Not easy to supervise a sales team while in prison) investdrinks.
To personally contact as many clients of Helmsley as possible by telephone, within the first month of the new office opening, to receive and welcome your comments and observations on this matter.

All enquiries regarding any Helmsley product or service should therefore now be directed to:

Helmsley (UK) Ltd, 6 Marble Alley, Studley, Warwickshire B80 7LD. Tel: 44 1527 854261; fax 44 1527 854043.

Please note that I also intend to apply for such clearances and approvals as may be necessary (if any), to prevent further interruptions to Helmsley business.

On a personal note, I can only ask for you to keep faith in Helmsley and myself whilst I attend to these outstanding issues, which I hope to resolve without delay. I sincerely hope this letter has reaffirmed to you the values that I, and therefore Helmsley, hold dear, and would of course be delighted for you to remain a client of Helmsley as we head into the next Millennium, where the fruition of this project awaits.

Finally, I would be very grateful if you could complete the enclosed questionnaire to ensure that all my records are up to date, accurate and representative of your true wishes. I feel that it is imperative, considering all the outside pressures the company has endured, that Helmsleys (sic) performance to date is properly reviewed, not only to assess your levels of satisfaction, but also to ensure the future of The Helmsley Group is built on solid foundations. Fulfilling and achieving the potential of Helmsley continues to be a major priority for me.

Thank you for being a client of The Helmsley Group and I look forward to hopefully a long and fruitful association with you.

Yours sincerely,

Craig Dean
Chief Executive Officer
The Helmsley Group

The unfortunate client of Helmsley, who passed on this letter to investdrinks, is now seeking a refund from his credit card company on the 100 litres of VSOP Grande Champagne Cognac that was bought in 1998.

The first set of accounts for Helmsley (UK) Ltd are now overdue. They should have been filed on 25th June 2001.

Serious Fraud Office (UK) annual report - 2000/2001
(posted 23/7/01)

The whisky and Champagne investment fraud trials are featured in the report which was published last week. 'The SFO is continuing to investigate other cases of suspected fraud in the whisky and champagne "investments" sector. This is very welcome and investdrinks very strongly urges the SFO to include claret 'investments' in their remit.

£70,000 wine investment con
(posted 2/7/01)

Andrew Preston, 51, of Congleton was found guilty last Thursday at Chester Crown Court of ripping off his wine investment clients. Preston was found guilty on five counts of fraudulent trading.

Preston had three companies Morton Fine Wines Ltd, Courtier Fine Wines Ltd, and Master Elm Ltd. Morton was for fine wine, Courtier day to day wines and Master Elm Ltd serviced supermarket trolleys and gas and electrical appliances. Investments clients found that some of their wine was missing when they can sell as Preston sold on some of the wine and kept the proceeds.

Among Preston's clients was Willy Russell, author of the film script for Shirley Valentine. Russell invested in 74 cases of wine, including some Port. However when he wanted to remove the wine from storage, he got only 60 cases. Ten cases of Château Beychevelle 1983 were among the 14 missing.

Preston's frauds came to light in 1996 when investors complained to the police, who began an investigation in February 1997. Preston obstructed the investigation and it took three years to establish that 60% of his clients' wine was still in store.

In all Preston stole £70,000 by selling 170 cases dishonestly. The current value is estimated at £115,000. Preston also tried to defraud Guardian Insurance of £14,460 by claiming that wine had been stolen from his house. The Prosecution said that Preston stole because he was desperate for money as Master Elm Ltd was in trouble and he was going through an expensive divorce.

Preston will be sentenced on August 3rd.

2000 First Growth offers - be wary
(posted 25/06/01)

Prices for 2000 First Growths (Lafite, Latour, Margaux etc.) are now in well in excess of £2,000. The sharp rise on last year's opening prices has been driven both by the châteaux owners, demand from around the world and also by the apparently restricted amounts of wine released. In recent years it has been customary for the châteaux to release 75%-80% en primeur. London brokers estimate that First Growths have released as little of 40% of their stock of 2000 so far.

Allocations even to well established brokers and merchants have been cut severely and this means that availability is very limited. There is always an inherent risk in buying en primeur because the wines are not delivered until 18 months to 24 months after you have ordered and paid for them. In today's market investdrinks advice is to deal only with companies that have an established track record. Companies that were founded in the last year or so by people with no previous experience in the wine trade may well have found it very difficult to obtain supplies of the most popular 2000,especially First Growths.

Record prices for First Growths
(posted 18/06/01)

As expected, anyone wanting to buy First Growth Bordeaux 2000 is going to have to pay record prices. Furthermore allocations to UK brokers and merchants have been cut back considerably so that these wines are in very short supply.

Fine & Rare Wines have released prices for first growths and are restricting purchases to six bottles each. Haut-Brion, Lafite, Latour, Margaux and Mouton-Rothschild are priced at £885 for six bottles, while Ausone (St Emilion) is £1,200 for six and Cheval-Blanc is £1,250 for the six. Lafleur (Pomerol) is even more expensive at £1,350 for six bottles.

This en primeur campaign has certainly seen the First Growths and the most fashionable wines from Pomerol and St Emilion widen the price distance between themselves and the other growths. A case of Leoville-Las-Cases is £1,050, Cos d'Estournel is a mere £575 and Ducru-Beaucaillou in at £595.

The prices of the Firsts are massively up on 1999 and it is obvious that these properties have decided to set as high a price as possible. Whether the prices of Firsts will rise a great deal more depends upon how determined people are to have top 2000 Bordeaux in the cellars irrespective of price. For the moment demand appears to be remaining extremely strong. It will also depend upon whether opinion on the quality of the 2000 vintage changes once the wines are in bottle.

Top Bordeaux abandons all restraint
(posted 11/6/2001)

On 5th June Latour announced that its first tranche price for the 2000 vintage was FF787 (£77.15) a bottle. This is an increase of 65% up on the opening price for the 1999. The Bordeaux négociants are likely to sell this for FF950 (£93.14) - £1,117.68 per case. The other first growths have swiftly followed suit all coming at the same price.

The price for the second tranche may be another 20%-25% higher and merchants are waiting for this to be released for deciding their prices. It seems likely that UK brokers will be selling First Growths for well over £1,500 and possibly close to £2,000 a case.

After the moderation shown for the earlier releases in late March and April, the market has become increasingly frenzied as the huge demand for 2000 Bordeaux has become clear. La Conseillante (Pomerol) is 66% up on its 1999 price and Beau-Séjour- Bécot 53% up. Seckford Wines Ltd had La Conseillante at £1,250 a case and in very short supply. Ballantynes of Cowbridge have just released Château Palmer 2000 at £810.00 a case. The 1999 costs around £450.

It is not yet clear whether the high prices of the First Growths will moderate the demand for these wines or whether people will be determined to buy these 2000s irrespective of the price and hoping perhaps to see quick profits from price rises over the next few months.

In the meantime anyone looking for wine to drink should look elsewhere.

Allwines=no wines?
(posted 21/05/01)

Unfortunately the news for private creditors of Allwines appears to be getting gloomier. The telephone and fax numbers listed for Allwines at Barons Court no longer work. David Allan has dismissed his solicitors, Clintons, who acted for him at the time of the creditors meeting on April 18th. It is not known whether Allan is still in London or has moved to one of a number of homes he is believed to own around the world.

The directors' sworn statement of affairs, which has been lodged with Companies House, shows that creditors are owed £1,472,769. There are 123 private creditors who bought £1,384,585 worth of wine through Allwines, thirteen trade creditors are owed £40,178 and twelve other private creditors whose wine had been sold but who have not seen the proceeds that totals £48,006.

It seems very possible that the final total will be higher and that it will be some time before the liquidators, Deloitte & Touche, are able to establish the complete picture of the losses. investdrinks has spoken to an investor who spent around £36,000 with Allwines from 1991 until just before the bust. The investor purchased large format bottles, a number of cases as well as a number of individual bottles of Château Lafleur (Pomerol) covering every vintage from 1981 to 1997 for which they paid £16,000. "David Allan was keen on these wines. He told me that a spread of vintages would be attractive to a collector." Not only is it unclear what has happened to this investor's wine or whether it was ever bought but, in the synopsis of creditors signed by David Allan on 18th April 2001, the amount he is owed is only a tenth of what he bought. It is possible that Allan may have underestimated other private creditors losses.

The investor attended the creditors' meeting in April. "It was the first one I have been to. The explanations given were unsatisfactory but I was struck by the way that everyone who spoke had treated David Allan as a friend. Nobody does now."

Significant demand for 2000 Bordeaux
(posted 07/05/01)

There appears to be a lot of interest in and demand for Bordeaux 2000s. Robert Parker, the American critic and the most influential Bordeaux opinion-former, is very enthusiastic about the vintage. This means that Americans and buyers in Asia-Pacific will be keen to purchase 2000s. Many wines will be on limited allocation. If you are intending to buy, do make sure that the merchant or broker you are dealing with has a good track record.

Allwines in £1.3 million bust
(posted 30/4/01)

Allwines Ltd, who specialised in offering fine wine in large format bottles chiefly for investment, has gone into liquidation with a provisional deficiency of £1,322,847 against assets estimated to realise £195,249. The company was founded in October 1974 and traded from 12 Barons Court Mansions, Gledstanes Road, London W14 9HZ. David Allan was managing director and the chief shareholder.

investdrinks understands that the creditors meeting held on 18th April 2001 was stormy. The provisional figure, although this is yet to be agreed, for Allwines customer wine records is £1,384,585. At this stage is unclear how much of this wine is in various bonded warehouses that includes London City Bond and Octavian. A full list of creditors was not available nor was it possible to yet indicate to Allwines' customers whether their wine had been identified in the warehouses. Trade creditors are owed £40,178.

Allwines creditors had already been concerned to receive a letter on 25th March 2001 from chartered accountants HLB Kidsons, appointed by Allwines to help put the company into liquidation. Kidsons warned creditors that 'Company records currently indicate a substantial difference between the stock details on customer files and that the stocks actually held at the warehouses'.

There was further concern that the auditors, Kidsons Impey, had been unable to determine 'whether proper accounting records had been maintained' for the years to March 1997, March 1998 and March 1999. This was because 'they were unable to attend the stocktaking and no alternative procedures were available to give us adequate assurance of the existence, ownership and value of the stocks.' Nor were they able to obtain confirm the existence and valuations of investments on the balance sheet nor undisclosed liabilities relating to stocks held on behalf of clients existed. Despite their inability to audit the company's principal assets and liabilities Kidsons Impey appeared to be happy to continue as the company's auditors until 2000 when they declined to continue as the company's auditors.

Colin Wiseman of Deloitte and Touche, Stonecutter Court, 1 Stonecutter Street, London EC4 was appointed liquidator. Given the apparent discrepancy between what Allwines customers thought they held and what is in the warehouses, investdrinks assumes that the Liquidator will wish to establish as soon possible whether there have been any significant movements in the last 12 months out of Allwines accounts at the various bonded warehouses as well as whether the company has been trading while insolvent.

investdrinks report on Bordeaux 2000

2000 en primeur selling well

Brokers report that the 2000s are selling well with interest in cru bourgeois as well as the better known classed growths. Many properties are yet to declare their prices but rises so far are in the range of 5%-10%. Whether the current demand for lesser known properties will translate into the chance to sell on at a profit is quite another matter.

General impression

The first vintage of the new millennium is certainly a very good one. Whether it is a great vintage depends upon who you talk to. It is one of those rare vintages where the three elements - fruit, tannins and acidity - reached proper maturity.

The wines have deep, dense colour, often with considerable strucrure and tannin. The best have a brilliant balance. Although there are some very charming, big fruited wines from the Right Bank (Pomerol, St Emilion etc.), overall the Left Bank, excluding Graves and Sauternes, have produced the more impressive wines.

Throughout Bordeaux some properties have gone for over-extraction producing wines with a very deep colour, full of purple glass staining matter, and initially an impressive mouthful of fruit before your mouth is blasted with massive tannins. They have extracted too much tannin as well so that the fruit and the tannins are separate. We will have to see whether the two will ever marry properly. In contrast wines like Château Cheval Blanc and Château Margaux do not have this enormous colour and fruit but have wonderful balance and harmony.

Work in progress

It is, however, crucial to remember that it is very difficult and dangerous to make definitive judgements at this stage. The wines are still very young. The final blend has probably not been made and the wines will spend at least another year or more in barrel before they are bottled. The 1999 Château Margaux, for instance, will be bottled in July. Remember that all the journalists and wine merchants judgements are made on samples drawn from barrels. Inevitably what was tasted last may not fully reflect the finished wine.

There are many sites that will carry assessments of individual properties. These include decanter.com, wine&dine and the Wine Spectator. Do remember that these assessments, however authoritative they appear, are snap shots of how the wines tasted at the end of March 2001 and that every vintage is different and can mature in surprising ways.

En primeur

Buying wines like Bordeaux en primeur means making a substantial down payment before the wines have been bottled. Once the wines are in bottle there is a customarily a further payment for transport, duty and sales tax unless the wines are being stored in bond - essential if the wines are for investment. There is certainly a element of risk in buying en primeur as there are usually a number of links in the chain. Almost all of the leading Bordeaux châteaux sell their wine to the Bordeaux merchants who in turn sell it on to merchants and brokers all over the world. These merchants and brokers may sell direct to the public but may also sell on to other merchants. If someone goes bust in this chain there can be problems as apparently the title to the wine does not pass from the château until the wine leaves their cellars.

When considering buying en primeur you should check not only the prices but also how well established the merchant or broker is.

In many ways the whole Bordeaux en primeur campaign is an elongated game - a cross between chicken and poker. It often takes the Bordeaux châteaux three months to release their prices. The first dribble out in late March and the final ones, usually the First Growths, do not release their prices until late May or early June.

Should I buy the 2000 en primeur?

Apart from improving the producers' cash flow, there are two reasons for buying en primeur. Firstly that the wines will increase in price and that it will never again be possible to buy wines as cheaply. Secondly to buy wines that will be difficult to find later. Many properties on the Left Bank make considerable quantities, so as a rule this only applies to some properties in Pomerol and St Emilion. Lafite (Pauillac) makes around 20,000 cases a year, while Le Pin in Pomerol makes only 600.

What will happen to prices is much more difficult to gauge. It is rumoured (and denied) that the First Growths will come out considerably higher than last year. The Second Growths may want to follow but may find the Bordeaux merchants reluctant to agree as they still have plenty of stock of the last three vintages. In addition nobody yet knows what effect the recent falls on the world stock markets will have. Nor the slowing of the US economy and the threat of layoffs. Fine wine is one of the first luxuries people stop buying when they lose economic confidence.

As a counter to these negatives, this may be a speculators' vintage because it is 2000 and because some investors' may choose wines as alternative vehicle. Here the First Growths plus Pétrus and le Pin will be the obvious choices.

The other imponderable is the weather. This winter has been very mild and many of the vines, particularly the Merlot, now have shoots of two or three cms and are in leaf. A heavy frost before the end of April would be particularly severe because the ground is saturated from the record rainfall since October 2000. Many properties may not release their prices until the threat of frost is past, so it may well not be until May that many of the prices come out and a pattern emerges.

Everywhere in Bordeaux last week there was talk of being reasonable but everyone knows that if a few properties get away with a substantial increase then reason will go out of the window. The Bordelais are convinced that 2000 is a great vintage. Whether the rest of the world is prepared to pay high prices is another matter.

Conclusion

As in previous years if you decide to invest in 2000 the only real option is the First Growths and possibly a few 'super-seconds'. However over recent vintages, it is only the First Growths which have significantly increased in value and then only in certain years.

Vintage Wines new push through Liquid Gold
(posted 5/2/01)

Vintage Wines Ltd are making a new promotional push directed at shareholders in Eircom, the privatised Irish telecommunications company. This is being done through Liquid Gold. The Irish Times published an article on the company on 1/2/2001 (http://www.ireland.com/newspaper/finance/2001/0201/fin7.htm)

Vintage Wines offered a defence of their activities: 'Mr Michael Moore, a manager with Vintage Wines, said: "Anyone can have their own opinion as to what a case of wine is worth." He said his company matched up people seeking certain wines with people selling those wines. "People have made profits from our company. We are not a bad company."

The company was based in the British Virgin Islands for tax reasons and he was not aware of any corporate structure registered in the Republic. The company bought and sold wine all over the world, he said. It had some 1,200 clients in the Republic and had returned profits of about £500,000 to them.

"There's no disputing that wine can differ in value," he said. "We have no problem with people having their own opinion as to the value of wine."

The article concluded with a warning: Mr David Dillon, a director of the Irish Wine Development Board, a trade organisation which promotes wine, advised people to be "very cautious" when spending large sums on wine and to be sure the firm they were dealing with was well established and well regarded.

WSET - Investing in Wine - A Step by Step Guide

The Wine & Spirit Education Trust in London are offering a lecture on investing in wine - a step by step guide. The first lecture is on 8th March, repeated on 19th April. Tickets £80 each which includes a tasting of some 'investment wines'. Details from the WSET on 020-7236 3551.

Vintage Wines Ltd

The wines offered by Vintage Wines are sourced by Davison Newman & Co Ltd, Suite 142, Temple Chambers, London EC4Y 0HP. Ian Lockwood, a director of Davison Newman, was shocked and surprised when investdrinks showed him the prices Vintage Wines charge their clients. He explained that in 1998 he was approached by a Richard Carey from company called Levitta Overseas Corporation of PO Box 3161, Road Town, Tortola, BVI. Levitta were setting up an internet/wine club venture and they need someone to source wines and then arrange their storage. When Lockwood started selecting wines in March/April 1999, he was told that Vintage Wines Ltd would be the selling agents. Thus Davison Newman select for Levitta and then receives details of customers' wines from Vintage Wines Ltd. For both companies faxes etc. go and come from Prinsengracht 64 in Amsterdam.

Despite the extortionate prices charged by Vintage Wines Ltd for modest Bordeaux, a number of investors have received their money back with a profit to boot. investdrinks is naturally delighted but either Vintage Wines Ltd are paying back investors from the enormous profit they make on selling a case at around 10 times its value or they are persuading new clients to invest at even high prices. It is understood that Vintage Wines have also operated in Australia.

Vintage Wines' addresses in Amsterdam and Bordeaux are run by companies offering office facilities including a telephone and fax answering service. It seems highly likely that the sales force of Vintage Wines is either based elsewhere in Holland or outside the country. investdrinks understands that the Dutch Chamber of Commerce has no company called Vintage Wines Ltd registered with them.

Details of the services offered by the office companies can be found at: http://www.bgg.nl and http://www.bordeaux-bureaux-services.fr/index_bbs.htm.There is no suggestion that these office companies operations are in anyway illegal.

VCA Vintners

Several complaints have been received about this company run by Simon Drake. It used to be based in London but is now located in Spain. Fuller details will be up shortly in this section and the directory.

Irish Exposure

Vintage Wines Ltd received a lot of exposure in the Irish newspapers and radio last week (w/b 6th November). Margaret Ward in the Sunday Times (Irish edition) and Richard Oakley in the Sunday Tribune both exposed the scam (5.11.2000). Joe Duffy on Live Line featured Vintage Wines Ltd on four occasions - 3rd, 7th, 8th and 9th November. Margaret Ward also mentioned a new company, Liquid Gold.

It is seems clear that there is only a receptionist at Vintage Wines offices at Prinsengracht 64 in Amsterdam and that the sales force are elsewhere.

(There will be a more detailed report next week.)

Vintage Wines Ltd - more extortionate prices - avoid like the plague

An Irish woman had a lucky escape this week. She had agreed to buy three cases of Château Tour Grand Faurie Saint-Emilion Grand Cru 1994 at £1876.00 per case. Fortunately she checked with investdrinks first and discovered that the Faurie was worth £140 a case. She nearly spent £5,628 on wine that is only worth £420. 1994 is a hard and tannic year and will certainly not increase much in value and certainly not an ordinary St Emilion Grand Cru, which will never be an investment wine.

Vintage Wines - extortionate prices - avoid

Vintage Wines Ltd, based in Amsterdam, continue to target potential investors southern Ireland. A Dublin man recently had a lucky escape. Having agreed to buy a case of Château Domaine de Peyrelongue Saint-Emilion Grand Cru for IR£2,235, he realised what an extortionate price this is and cancelled the cheque. He had first come across the company at the Money 2000 conference in Dublin earlier this year.

Vintage Wines appear to be confused. There are two St Emilion Peyrelongue properties - one is a château and one a domaine. In any event 1994 is not a great year and these are minor St Emilion estates which are so little known that it has been very difficult to get an exact market value quote. Around £100 sterling a case duty paid is the best guess - very far from IR£2,235. Reading the small print of Vintage Wines terms and conditions shows reveals that:

'The buyer acknowledges and agrees that there will be a price differential between the price paid by the seller (Vintage Wines) to purchase the goods and the price quoted by the seller to the buyer and such differential will be in excess of at least one hundred percent.'

Well placed sources tell investdrinks that Joe McConville, ex-Napier and Croft & Dupont is involved with Vintage Wines. Croft & Dupont were recently closed by the UK DTI for charging excessive prices and failing to buy the wine ordered.

Bordeaux Vintners Ltd (BVI) and Bordeaux Wine Consultants

Anyone contacted by either of these companies would be wise to check prices of wine offered from other sources before agreeing to purchase wines for investment.

Bordeaux Vintners Ltd, trading as BVI, was founded on 8th October 1998 and was formerly called Beau Vins Ltd. It offers wine as an investment. investdrinks would like to hear from anyone who has recently bought wines from BVI, in particular what was bought and at what price.

Bordeaux Wine Consultants was founded on 26th June 2000 and offers wine as an investment.

Vintage Wines still targeting Irish investors

Vintage Wines based in Holland have perpetrated some of the most outrageous rip-offs amongst the claret investment companies. The bulk of their business appears to be in Ireland. Here is an unfortunate example of an Irish investor caught out.

‘I recently invested with Vintage Wines for a case of Chateau Paveil de Luze Margaux 1994 for Ir£2300 (£1,869.90) and I'm now fearful that it was a scam. Could you advise?’

One of the companies refusing to supply the claret web gave this reply:

Chateau Paveil de Luze is a Cru Bourgeois (ie. non 1855 Grand Cru Classification status) from Margaux, incidentally classified by Robert Parker as average (v. subjective in the context). As you will know, 1994 was an average vintage, with pleasant wines but nothing like the quality of the 1995, 1996 or even, dare I say it, 1997 vintages.

Frankly, at very most I would have expected to pay no more than £120 case. And that is probably generous. Of course, it may be that the château is in new hands and is producing wines of exceptional brilliance, but if so, it's a very well kept secret. To put in context, Château Margaux, the greatest wine of the appellation is worth about £850 a case.

It makes me ill to think of it.'

Stanley Knight Ltd

There is a new entrant into the over-priced claret investment field: Stanley Knight Ltd. A Henry Wood of Stanley Knight recently offered a shareholder of Pacific Media Corps a case of Lafite 1996 for £4,048. In a subsequent conversation with Ashley Witter the Lafite was quoted at £3,750. Fortunately the putative investor contacted the Malt Whisky Helpline and the order has now been cancelled.

Stanley Knight was founded on 2nd November 1998.

Ashley Witter - bogus claim of exclusive international access

Ashley Witter Ltd claim to have 'exclusive access to the International arenas for buying and selling for Fine Wines'. As Ashley Witter's 'experienced wine specialists' must know this is complete rubbish. A very significant proportion of the business of Farr Vintners, one of the world's biggest wine brokers who are based in London, is international.

On 25th May I faxed Harold Alexander, managing director of Ashley Witter, asking for an explanation of this extraordinary claim. I am not entirely surprised that I have yet to receive a reply.

Over-priced St Emilion

investdrinks understands that Ashley Witter are offering 1996 Château Troplong-Mondot for £595 (in bond). 'It has the best investment potential,' a potential client was apparently told. Fortunately they contacted Lea & Sandeman, a dynamic wine merchant on London's Fulham Road, to check the price. They were quoted £365 which included duty and vat. Fine & Rare Wines have the 1996 at £245 (in bond) - a difference of £350 or 143% more.

They claim that 'as part of our on going service, Ashley Witter shall be tracking and monitoring wine prices on the International Market, if we notice an opportunity for you to sell your wine(s) or part of your portfolio to release a gain, we shall contact you.'

Anyone buying Troplong-Mondot from Ashley Witter is likely to have a long wait before receiving a call to announce a gain.

Effectively part of the Claret Web

Whatever the exact ownership of Ashley Witter may be, they can be considered part of the claret web as a comparison of their brochure with those in the web shows.

"This is now the beginning of a very serious wine market not just for consumption but for collection, storing and saving, even swapping between generations of people for many to appreciate."

Ashley Witter Ltd

Goldman Williams Ltd

Harrington Ross Ltd

Pembridge Villiers Ltd

"The fine wines from the region of Bordeaux make excellent and memorable gifts to family and close friends. It may be the case of fine wine that has not reached its optimal drinking age or just a fine vintage to be savoured for that special event, such as a 21st birthday or a wedding celebration or even retirement."

Whatever your need are, Ashley Witter, Goldman Williams, Harrington Ross, Pembridge Villiers* will help you with any acquisition that you require.

* delete as appropriate - investdrinks

Croft & Dupont were duly wound up in the public interest in London's High Court on April 12th.

Serious Fraud Office (UK) annual report - 2000/2001
(posted 23/7/01)

The whisky and Champagne investment fraud trials are featured in the report which was published last week. 'The SFO is continuing to investigate other cases of suspected fraud in the whisky and champagne "investments" sector. This is very welcome and investdrinks very strongly urges the SFO to include claret 'investments' in their remit.

£70,000 wine investment con
(posted 2/7/01)

Andrew Preston, 51, of Congleton was found guilty last Thursday at Chester Crown Court of ripping off his wine investment clients. Preston was found guilty on five counts of fraudulent trading.

Preston had three companies Morton Fine Wines Ltd, Courtier Fine Wines Ltd, and Master Elm Ltd. Morton was for fine wine, Courtier day to day wines and Master Elm Ltd serviced supermarket trolleys and gas and electrical appliances. Investments clients found that some of their wine was missing when they can sell as Preston sold on some of the wine and kept the proceeds.

Among Preston's clients was Willy Russell, author of the film script for Shirley Valentine. Russell invested in 74 cases of wine, including some Port. However when he wanted to remove the wine from storage, he got only 60 cases. Ten cases of Château Beychevelle 1983 were among the 14 missing.

Preston's frauds came to light in 1996 when investors complained to the police, who began an investigation in February 1997. Preston obstructed the investigation and it took three years to establish that 60% of his clients' wine was still in store.

In all Preston stole £70,000 by selling 170 cases dishonestly. The current value is estimated at £115,000. Preston also tried to defraud Guardian Insurance of £14,460 by claiming that wine had been stolen from his house. The Prosecution said that Preston stole because he was desperate for money as Master Elm Ltd was in trouble and he was going through an expensive divorce.

Preston will be sentenced on August 3rd.

2000 First Growth offers - be wary
(posted 25/06/01)

Prices for 2000 First Growths (Lafite, Latour, Margaux etc.) are now in well in excess of £2,000. The sharp rise on last year's opening prices has been driven both by the châteaux owners, demand from around the world and also by the apparently restricted amounts of wine released. In recent years it has been customary for the châteaux to release 75%-80% en primeur. London brokers estimate that First Growths have released as little of 40% of their stock of 2000 so far.

Allocations even to well established brokers and merchants have been cut severely and this means that availability is very limited. There is always an inherent risk in buying en primeur because the wines are not delivered until 18 months to 24 months after you have ordered and paid for them. In today's market investdrinks advice is to deal only with companies that have an established track record. Companies that were founded in the last year or so by people with no previous experience in the wine trade may well have found it very difficult to obtain supplies of the most popular 2000,especially First Growths.

Record prices for First Growths
(posted 18/06/01)

As expected, anyone wanting to buy First Growth Bordeaux 2000 is going to have to pay record prices. Furthermore allocations to UK brokers and merchants have been cut back considerably so that these wines are in very short supply.

Fine & Rare Wines have released prices for first growths and are restricting purchases to six bottles each. Haut-Brion, Lafite, Latour, Margaux and Mouton-Rothschild are priced at £885 for six bottles, while Ausone (St Emilion) is £1,200 for six and Cheval-Blanc is £1,250 for the six. Lafleur (Pomerol) is even more expensive at £1,350 for six bottles.

This en primeur campaign has certainly seen the First Growths and the most fashionable wines from Pomerol and St Emilion widen the price distance between themselves and the other growths. A case of Leoville-Las-Cases is £1,050, Cos d'Estournel is a mere £575 and Ducru-Beaucaillou in at £595.

The prices of the Firsts are massively up on 1999 and it is obvious that these properties have decided to set as high a price as possible. Whether the prices of Firsts will rise a great deal more depends upon how determined people are to have top 2000 Bordeaux in the cellars irrespective of price. For the moment demand appears to be remaining extremely strong. It will also depend upon whether opinion on the quality of the 2000 vintage changes once the wines are in bottle.

Top Bordeaux abandons all restraint
(posted 11/6/2001)

On 5th June Latour announced that its first tranche price for the 2000 vintage was FF787 (£77.15) a bottle. This is an increase of 65% up on the opening price for the 1999. The Bordeaux négociants are likely to sell this for FF950 (£93.14) - £1,117.68 per case. The other first growths have swiftly followed suit all coming at the same price.

The price for the second tranche may be another 20%-25% higher and merchants are waiting for this to be released for deciding their prices. It seems likely that UK brokers will be selling First Growths for well over £1,500 and possibly close to £2,000 a case.

After the moderation shown for the earlier releases in late March and April, the market has become increasingly frenzied as the huge demand for 2000 Bordeaux has become clear. La Conseillante (Pomerol) is 66% up on its 1999 price and Beau-Séjour- Bécot 53% up. Seckford Wines Ltd had La Conseillante at £1,250 a case and in very short supply. Ballantynes of Cowbridge have just released Château Palmer 2000 at £810.00 a case. The 1999 costs around £450.

It is not yet clear whether the high prices of the First Growths will moderate the demand for these wines or whether people will be determined to buy these 2000s irrespective of the price and hoping perhaps to see quick profits from price rises over the next few months.

In the meantime anyone looking for wine to drink should look elsewhere.

Allwines=no wines?
(posted 21/05/01)

Unfortunately the news for private creditors of Allwines appears to be getting gloomier. The telephone and fax numbers listed for Allwines at Barons Court no longer work. David Allan has dismissed his solicitors, Clintons, who acted for him at the time of the creditors meeting on April 18th. It is not known whether Allan is still in London or has moved to one of a number of homes he is believed to own around the world.

The directors' sworn statement of affairs, which has been lodged with Companies House, shows that creditors are owed £1,472,769. There are 123 private creditors who bought £1,384,585 worth of wine through Allwines, thirteen trade creditors are owed £40,178 and twelve other private creditors whose wine had been sold but who have not seen the proceeds that totals £48,006.

It seems very possible that the final total will be higher and that it will be some time before the liquidators, Deloitte & Touche, are able to establish the complete picture of the losses. investdrinks has spoken to an investor who spent around £36,000 with Allwines from 1991 until just before the bust. The investor purchased large format bottles, a number of cases as well as a number of individual bottles of Château Lafleur (Pomerol) covering every vintage from 1981 to 1997 for which they paid £16,000. "David Allan was keen on these wines. He told me that a spread of vintages would be attractive to a collector." Not only is it unclear what has happened to this investor's wine or whether it was ever bought but, in the synopsis of creditors signed by David Allan on 18th April 2001, the amount he is owed is only a tenth of what he bought. It is possible that Allan may have underestimated other private creditors losses.

The investor attended the creditors' meeting in April. "It was the first one I have been to. The explanations given were unsatisfactory but I was struck by the way that everyone who spoke had treated David Allan as a friend. Nobody does now."

Significant demand for 2000 Bordeaux
(posted 07/05/01)

There appears to be a lot of interest in and demand for Bordeaux 2000s. Robert Parker, the American critic and the most influential Bordeaux opinion-former, is very enthusiastic about the vintage. This means that Americans and buyers in Asia-Pacific will be keen to purchase 2000s. Many wines will be on limited allocation. If you are intending to buy, do make sure that the merchant or broker you are dealing with has a good track record.

Allwines in £1.3 million bust
(posted 30/4/01)

Allwines Ltd, who specialised in offering fine wine in large format bottles chiefly for investment, has gone into liquidation with a provisional deficiency of £1,322,847 against assets estimated to realise £195,249. The company was founded in October 1974 and traded from 12 Barons Court Mansions, Gledstanes Road, London W14 9HZ. David Allan was managing director and the chief shareholder.

investdrinks understands that the creditors meeting held on 18th April 2001 was stormy. The provisional figure, although this is yet to be agreed, for Allwines customer wine records is £1,384,585. At this stage is unclear how much of this wine is in various bonded warehouses that includes London City Bond and Octavian. A full list of creditors was not available nor was it possible to yet indicate to Allwines' customers whether their wine had been identified in the warehouses. Trade creditors are owed £40,178.

Allwines creditors had already been concerned to receive a letter on 25th March 2001 from chartered accountants HLB Kidsons, appointed by Allwines to help put the company into liquidation. Kidsons warned creditors that 'Company records currently indicate a substantial difference between the stock details on customer files and that the stocks actually held at the warehouses'.

There was further concern that the auditors, Kidsons Impey, had been unable to determine 'whether proper accounting records had been maintained' for the years to March 1997, March 1998 and March 1999. This was because 'they were unable to attend the stocktaking and no alternative procedures were available to give us adequate assurance of the existence, ownership and value of the stocks.' Nor were they able to obtain confirm the existence and valuations of investments on the balance sheet nor undisclosed liabilities relating to stocks held on behalf of clients existed. Despite their inability to audit the company's principal assets and liabilities Kidsons Impey appeared to be happy to continue as the company's auditors until 2000 when they declined to continue as the company's auditors.

Colin Wiseman of Deloitte and Touche, Stonecutter Court, 1 Stonecutter Street, London EC4 was appointed liquidator. Given the apparent discrepancy between what Allwines customers thought they held and what is in the warehouses, investdrinks assumes that the Liquidator will wish to establish as soon possible whether there have been any significant movements in the last 12 months out of Allwines accounts at the various bonded warehouses as well as whether the company has been trading while insolvent.

investdrinks report on Bordeaux 2000

2000 en primeur selling well

Brokers report that the 2000s are selling well with interest in cru bourgeois as well as the better known classed growths. Many properties are yet to declare their prices but rises so far are in the range of 5%-10%. Whether the current demand for lesser known properties will translate into the chance to sell on at a profit is quite another matter.

General impression

The first vintage of the new millennium is certainly a very good one. Whether it is a great vintage depends upon who you talk to. It is one of those rare vintages where the three elements - fruit, tannins and acidity - reached proper maturity.

The wines have deep, dense colour, often with considerable strucrure and tannin. The best have a brilliant balance. Although there are some very charming, big fruited wines from the Right Bank (Pomerol, St Emilion etc.), overall the Left Bank, excluding Graves and Sauternes, have produced the more impressive wines.

Throughout Bordeaux some properties have gone for over-extraction producing wines with a very deep colour, full of purple glass staining matter, and initially an impressive mouthful of fruit before your mouth is blasted with massive tannins. They have extracted too much tannin as well so that the fruit and the tannins are separate. We will have to see whether the two will ever marry properly. In contrast wines like Château Cheval Blanc and Château Margaux do not have this enormous colour and fruit but have wonderful balance and harmony.

Work in progress

It is, however, crucial to remember that it is very difficult and dangerous to make definitive judgements at this stage. The wines are still very young. The final blend has probably not been made and the wines will spend at least another year or more in barrel before they are bottled. The 1999 Château Margaux, for instance, will be bottled in July. Remember that all the journalists and wine merchants judgements are made on samples drawn from barrels. Inevitably what was tasted last may not fully reflect the finished wine.

There are many sites that will carry assessments of individual properties. These include decanter.com, wine&dine and the Wine Spectator. Do remember that these assessments, however authoritative they appear, are snap shots of how the wines tasted at the end of March 2001 and that every vintage is different and can mature in surprising ways.

En primeur

Buying wines like Bordeaux en primeur means making a substantial down payment before the wines have been bottled. Once the wines are in bottle there is a customarily a further payment for transport, duty and sales tax unless the wines are being stored in bond - essential if the wines are for investment. There is certainly a element of risk in buying en primeur as there are usually a number of links in the chain. Almost all of the leading Bordeaux châteaux sell their wine to the Bordeaux merchants who in turn sell it on to merchants and brokers all over the world. These merchants and brokers may sell direct to the public but may also sell on to other merchants. If someone goes bust in this chain there can be problems as apparently the title to the wine does not pass from the château until the wine leaves their cellars.

When considering buying en primeur you should check not only the prices but also how well established the merchant or broker is.

In many ways the whole Bordeaux en primeur campaign is an elongated game - a cross between chicken and poker. It often takes the Bordeaux châteaux three months to release their prices. The first dribble out in late March and the final ones, usually the First Growths, do not release their prices until late May or early June.

Should I buy the 2000 en primeur?

Apart from improving the producers' cash flow, there are two reasons for buying en primeur. Firstly that the wines will increase in price and that it will never again be possible to buy wines as cheaply. Secondly to buy wines that will be difficult to find later. Many properties on the Left Bank make considerable quantities, so as a rule this only applies to some properties in Pomerol and St Emilion. Lafite (Pauillac) makes around 20,000 cases a year, while Le Pin in Pomerol makes only 600.

What will happen to prices is much more difficult to gauge. It is rumoured (and denied) that the First Growths will come out considerably higher than last year. The Second Growths may want to follow but may find the Bordeaux merchants reluctant to agree as they still have plenty of stock of the last three vintages. In addition nobody yet knows what effect the recent falls on the world stock markets will have. Nor the slowing of the US economy and the threat of layoffs. Fine wine is one of the first luxuries people stop buying when they lose economic confidence.

As a counter to these negatives, this may be a speculators' vintage because it is 2000 and because some investors' may choose wines as alternative vehicle. Here the First Growths plus Pétrus and le Pin will be the obvious choices.

The other imponderable is the weather. This winter has been very mild and many of the vines, particularly the Merlot, now have shoots of two or three cms and are in leaf. A heavy frost before the end of April would be particularly severe because the ground is saturated from the record rainfall since October 2000. Many properties may not release their prices until the threat of frost is past, so it may well not be until May that many of the prices come out and a pattern emerges.

Everywhere in Bordeaux last week there was talk of being reasonable but everyone knows that if a few properties get away with a substantial increase then reason will go out of the window. The Bordelais are convinced that 2000 is a great vintage. Whether the rest of the world is prepared to pay high prices is another matter.

Conclusion

As in previous years if you decide to invest in 2000 the only real option is the First Growths and possibly a few 'super-seconds'. However over recent vintages, it is only the First Growths which have significantly increased in value and then only in certain years.

Vintage Wines new push through Liquid Gold
(posted 5/2/01)

Vintage Wines Ltd are making a new promotional push directed at shareholders in Eircom, the privatised Irish telecommunications company. This is being done through Liquid Gold. The Irish Times published an article on the company on 1/2/2001 (http://www.ireland.com/newspaper/finance/2001/0201/fin7.htm)

Vintage Wines offered a defence of their activities: 'Mr Michael Moore, a manager with Vintage Wines, said: "Anyone can have their own opinion as to what a case of wine is worth." He said his company matched up people seeking certain wines with people selling those wines. "People have made profits from our company. We are not a bad company."

The company was based in the British Virgin Islands for tax reasons and he was not aware of any corporate structure registered in the Republic. The company bought and sold wine all over the world, he said. It had some 1,200 clients in the Republic and had returned profits of about £500,000 to them.

"There's no disputing that wine can differ in value," he said. "We have no problem with people having their own opinion as to the value of wine."

The article concluded with a warning: Mr David Dillon, a director of the Irish Wine Development Board, a trade organisation which promotes wine, advised people to be "very cautious" when spending large sums on wine and to be sure the firm they were dealing with was well established and well regarded.

WSET - Investing in Wine - A Step by Step Guide

The Wine & Spirit Education Trust in London are offering a lecture on investing in wine - a step by step guide. The first lecture is on 8th March, repeated on 19th April. Tickets £80 each which includes a tasting of some 'investment wines'. Details from the WSET on 020-7236 3551.

Vintage Wines Ltd

The wines offered by Vintage Wines are sourced by Davison Newman & Co Ltd, Suite 142, Temple Chambers, London EC4Y 0HP. Ian Lockwood, a director of Davison Newman, was shocked and surprised when investdrinks showed him the prices Vintage Wines charge their clients. He explained that in 1998 he was approached by a Richard Carey from company called Levitta Overseas Corporation of PO Box 3161, Road Town, Tortola, BVI. Levitta were setting up an internet/wine club venture and they need someone to source wines and then arrange their storage. When Lockwood started selecting wines in March/April 1999, he was told that Vintage Wines Ltd would be the selling agents. Thus Davison Newman select for Levitta and then receives details of customers' wines from Vintage Wines Ltd. For both companies faxes etc. go and come from Prinsengracht 64 in Amsterdam.

Despite the extortionate prices charged by Vintage Wines Ltd for modest Bordeaux, a number of investors have received their money back with a profit to boot. investdrinks is naturally delighted but either Vintage Wines Ltd are paying back investors from the enormous profit they make on selling a case at around 10 times its value or they are persuading new clients to invest at even high prices. It is understood that Vintage Wines have also operated in Australia.

Vintage Wines' addresses in Amsterdam and Bordeaux are run by companies offering office facilities including a telephone and fax answering service. It seems highly likely that the sales force of Vintage Wines is either based elsewhere in Holland or outside the country. investdrinks understands that the Dutch Chamber of Commerce has no company called Vintage Wines Ltd registered with them.

Details of the services offered by the office companies can be found at: http://www.bgg.nl and http://www.bordeaux-bureaux-services.fr/index_bbs.htm.There is no suggestion that these office companies operations are in anyway illegal.

VCA Vintners

Several complaints have been received about this company run by Simon Drake. It used to be based in London but is now located in Spain. Fuller details will be up shortly in this section and the directory.

Irish Exposure

Vintage Wines Ltd received a lot of exposure in the Irish newspapers and radio last week (w/b 6th November). Margaret Ward in the Sunday Times (Irish edition) and Richard Oakley in the Sunday Tribune both exposed the scam (5.11.2000). Joe Duffy on Live Line featured Vintage Wines Ltd on four occasions - 3rd, 7th, 8th and 9th November. Margaret Ward also mentioned a new company, Liquid Gold.

It is seems clear that there is only a receptionist at Vintage Wines offices at Prinsengracht 64 in Amsterdam and that the sales force are elsewhere.

(There will be a more detailed report next week.)

Vintage Wines Ltd - more extortionate prices - avoid like the plague

An Irish woman had a lucky escape this week. She had agreed to buy three cases of Château Tour Grand Faurie Saint-Emilion Grand Cru 1994 at £1876.00 per case. Fortunately she checked with investdrinks first and discovered that the Faurie was worth £140 a case. She nearly spent £5,628 on wine that is only worth £420. 1994 is a hard and tannic year and will certainly not increase much in value and certainly not an ordinary St Emilion Grand Cru, which will never be an investment wine.

Vintage Wines - extortionate prices - avoid

Vintage Wines Ltd, based in Amsterdam, continue to target potential investors southern Ireland. A Dublin man recently had a lucky escape. Having agreed to buy a case of Château Domaine de Peyrelongue Saint-Emilion Grand Cru for IR£2,235, he realised what an extortionate price this is and cancelled the cheque. He had first come across the company at the Money 2000 conference in Dublin earlier this year.

Vintage Wines appear to be confused. There are two St Emilion Peyrelongue properties - one is a château and one a domaine. In any event 1994 is not a great year and these are minor St Emilion estates which are so little known that it has been very difficult to get an exact market value quote. Around £100 sterling a case duty paid is the best guess - very far from IR£2,235. Reading the small print of Vintage Wines terms and conditions shows reveals that:

'The buyer acknowledges and agrees that there will be a price differential between the price paid by the seller (Vintage Wines) to purchase the goods and the price quoted by the seller to the buyer and such differential will be in excess of at least one hundred percent.'

Well placed sources tell investdrinks that Joe McConville, ex-Napier and Croft & Dupont is involved with Vintage Wines. Croft & Dupont were recently closed by the UK DTI for charging excessive prices and failing to buy the wine ordered.

Bordeaux Vintners Ltd (BVI) and Bordeaux Wine Consultants

Anyone contacted by either of these companies would be wise to check prices of wine offered from other sources before agreeing to purchase wines for investment.

Bordeaux Vintners Ltd, trading as BVI, was founded on 8th October 1998 and was formerly called Beau Vins Ltd. It offers wine as an investment. investdrinks would like to hear from anyone who has recently bought wines from BVI, in particular what was bought and at what price.

Bordeaux Wine Consultants was founded on 26th June 2000 and offers wine as an investment.

Vintage Wines still targeting Irish investors

Vintage Wines based in Holland have perpetrated some of the most outrageous rip-offs amongst the claret investment companies. The bulk of their business appears to be in Ireland. Here is an unfortunate example of an Irish investor caught out.

‘I recently invested with Vintage Wines for a case of Chateau Paveil de Luze Margaux 1994 for Ir£2300 (£1,869.90) and I'm now fearful that it was a scam. Could you advise?’

One of the companies refusing to supply the claret web gave this reply:

Chateau Paveil de Luze is a Cru Bourgeois (ie. non 1855 Grand Cru Classification status) from Margaux, incidentally classified by Robert Parker as average (v. subjective in the context). As you will know, 1994 was an average vintage, with pleasant wines but nothing like the quality of the 1995, 1996 or even, dare I say it, 1997 vintages.

Frankly, at very most I would have expected to pay no more than £120 case. And that is probably generous. Of course, it may be that the château is in new hands and is producing wines of exceptional brilliance, but if so, it's a very well kept secret. To put in context, Château Margaux, the greatest wine of the appellation is worth about £850 a case.

It makes me ill to think of it.'

Stanley Knight Ltd

There is a new entrant into the over-priced claret investment field: Stanley Knight Ltd. A Henry Wood of Stanley Knight recently offered a shareholder of Pacific Media Corps a case of Lafite 1996 for £4,048. In a subsequent conversation with Ashley Witter the Lafite was quoted at £3,750. Fortunately the putative investor contacted the Malt Whisky Helpline and the order has now been cancelled.

Stanley Knight was founded on 2nd November 1998.

Ashley Witter - bogus claim of exclusive international access

Ashley Witter Ltd claim to have 'exclusive access to the International arenas for buying and selling for Fine Wines'. As Ashley Witter's 'experienced wine specialists' must know this is complete rubbish. A very significant proportion of the business of Farr Vintners, one of the world's biggest wine brokers who are based in London, is international.

On 25th May I faxed Harold Alexander, managing director of Ashley Witter, asking for an explanation of this extraordinary claim. I am not entirely surprised that I have yet to receive a reply.

Over-priced St Emilion

investdrinks understands that Ashley Witter are offering 1996 Château Troplong-Mondot for £595 (in bond). 'It has the best investment potential,' a potential client was apparently told. Fortunately they contacted Lea & Sandeman, a dynamic wine merchant on London's Fulham Road, to check the price. They were quoted £365 which included duty and vat. Fine & Rare Wines have the 1996 at £245 (in bond) - a difference of £350 or 143% more.

They claim that 'as part of our on going service, Ashley Witter shall be tracking and monitoring wine prices on the International Market, if we notice an opportunity for you to sell your wine(s) or part of your portfolio to release a gain, we shall contact you.'

Anyone buying Troplong-Mondot from Ashley Witter is likely to have a long wait before receiving a call to announce a gain.

Effectively part of the Claret Web

Whatever the exact ownership of Ashley Witter may be, they can be considered part of the claret web as a comparison of their brochure with those in the web shows.

"This is now the beginning of a very serious wine market not just for consumption but for collection, storing and saving, even swapping between generations of people for many to appreciate."

Ashley Witter Ltd

Goldman Williams Ltd

Harrington Ross Ltd

Pembridge Villiers Ltd

"The fine wines from the region of Bordeaux make excellent and memorable gifts to family and close friends. It may be the case of fine wine that has not reached its optimal drinking age or just a fine vintage to be savoured for that special event, such as a 21st birthday or a wedding celebration or even retirement."

Whatever your need are, Ashley Witter, Goldman Williams, Harrington Ross, Pembridge Villiers* will help you with any acquisition that you require.

* delete as appropriate - investdrinks

Croft & Dupont were duly wound up in the public interest in London's High Court on April 12th.

  investdrinks and the lawyers
 

Having informed Heros-Churchill etc. that I had launched a site I wasn’t entirely surprised to receive on Thursday afternoon a letter from Austin’s learned friends, who also contacted tera-byte in Canada demanding that the site was closed down immediately because it was defamatory and inaccurate. Coincidentally Fairmays, solicitors for Heros-Churchill, also contacted tera-byte that day. tera-byte’s reaction has been instructive. They asked me to provide proof to back up material on my site but they also demanded from my learned friends to furnish proof.

As requested I sent proof, including various Champagne trades certificates and invoices from Goldman Williams and City Vintners. In the email from Fairmays, Stuart Evans claimed. ‘These articles (material on the site about Heros-Churchill) are inaccurate and defamatory and designed to damage the businesses of our clients. The internet service provider, Mailbox Internet Limited, when satisfied that our clients' allegations were correct, immediately removed these and other offending articles on or around 27 March 2000.’

Mailbox Internet Ltd kindly emailed tera-byte as follows:

‘Because of a recent unfortunate judgement (Godfrey vs Demon) service providers in the UK can be forced to remove material from websites which might be defamatory. I have been forced to do this by Fairmays Solicitors. They have supplied me with a list of paragraphs on the Wine and Dine ezine site which they have specified to me are Defamatory of their clients. I have seen no evidence that any of the material is defamatory, and indeed I have seen much material and statements which suggest that what is alleged may be true.

tera-byte have told me that they are satisfied that I am doing everything I can to keep the site accurate and have posted the following decidedly robust reply to Evans at Fairmays.

‘I'm in receipt of your fax and according to the letters you have provided and subsequent letters Mr. Budd has provided there is no clear defamatory statements on his website in respect to your clients and therefore the site will remain up. The fax you sent me will be forwarded to Mr. Budd in order for him to address the allegations you made against him , as it does pertain to his website and he is the author anything stated in that fax should be in his hands already. Your piece about Demon internet has no meaning for a couple of reasons.

1.) it appears that Mr. Budd is either stating his opinion or is accurate in his description of your clients business practice , he has also stated he would remove anything untrue if given the facts.

2.) In Canada we have laws to protect ISP's from moronic decisions like those apparently made in your country, so therefore your threats have little meaning. And yes I did write I felt it was a laughing matter, I cant believe any respectable Law firm would deal with clients such as yours who appear to be obviously out to rip people off.

Steve Keyser
CEO
Tera-byte Dot Com Inc.

Saunders Bearman

A letter (13.4.2000) from Saunders Bearman, Soho solicitors representing Raun Austin, City Vintners and Goldman Williams offers an explanation of the claret web’s pricing policy. ‘Our clients do not accept that the wine they sell is overpriced. It can of course be obtained more cheaply elsewhere. What cannot be obtained is the quality of service our clients provide.’ Perhaps in the interests of offering ‘tailored advice’ City Vintners, Goldman Williams and other claret web companies should spell out how much more their ‘quality of service’ adds to the price of their claret.

Saunders Bearman have invited me to contact London City Bond to ‘obtain independent confirmation of our clients bona fides ‘ by contacting London City Bond. I have accepted their kind offer.

Having informed Giles Cadman (Wine Corporation Ltd) and Raun Austin (the claret web) that I had launched a site I wasn’t entirely surprised to receive on Thursday afternoon a letter from Austin’s learned friends, who also contacted tera-byte in Canada demanding that the site was closed down immediately because it was defamatory and inaccurate. Coincidentally Fairmays, solicitors for Heros-Churchill, also contacted tera-byte that day. tera-byte’s reaction has been instructive. They asked me to provide proof to back up material on my site but they also demanded from my learned friends to furnish proof.

As requested I sent proof, including various Champagne trades certificates and invoices from Goldman Williams and City Vintners. In the email from Fairmays, Stuart Evans claimed. ‘These articles (material on the site about Heros-Churchill) are inaccurate and defamatory and designed to damage the businesses of our clients. The internet service provider, Mailbox Internet Limited, when satisfied that our clients' allegations were correct, immediately removed these and other offending articles on or around 27 March 2000.’

Mailbox Internet Ltd kindly emailed tera-byte as follows:

‘Because of a recent unfortunate judgement (Godfrey vs Demon) service providers in the UK can be forced to remove material from websites which might be defamatory. I have been forced to do this by Fairmays Solicitors. They have supplied me with a list of paragraphs on the Wine and Dine ezine site which they have specified to me are Defamatory of their clients. I have seen no evidence that any of the material is defamatory, and indeed I have seen much material and statements which suggest that what is alleged may be true.

tera-byte have told me that they are satisfied that I am doing everything I can to keep the site accurate and have posted the following decidedly robust reply to Evans at Fairmays.

‘I'm in receipt of your fax and according to the letters you have provided and subsequent letters Mr. Budd has provided there is no clear defamatory statements on his website in respect to your clients and therefore the site will remain up. The fax you sent me will be forwarded to Mr. Budd in order for him to address the allegations you made against him , as it does pertain to his website and he is the author anything stated in that fax should be in his hands already. Your piece about Demon internet has no meaning for a couple of reasons.

1.) it appears that Mr. Budd is either stating his opinion or is accurate in his description of your clients business practice , he has also stated he would remove anything untrue if given the facts.

2.) In Canada we have laws to protect ISP's from moronic decisions like those apparently made in your country, so therefore your threats have little meaning. And yes I did write I felt it was a laughing matter, I cant believe any respectable Law firm would deal with clients such as yours who appear to be obviously out to rip people off.

Steve Keyser
CEO
Tera-byte Dot Com Inc.