The offer for the secured energy bonds looked good. It was a chance to invest in a project to put solar panels in 22 schools across the country. The refund was offered was a decent rate of 6.5% over three years.
This was 2013. I first saw the advertisement in the newspaper “the guardian”. I’m not a big investor, but I wanted to put money into environmentally sustainable project.
Secured energy bonds (SEB) has appealed to me on several levels. As an environmentalist I wanted to invest in something to combat climate change. I, too, was one of many investors suffered from the rapid drop in interest rates and are looking for something that would give me a little more to return.
There are risks – it’s still a mini-bond, the initiators of the project failed to raise funds from more traditional sources such as banks.
However, my fears were satisfied with the presence of independent portfolio managers (IPM), which is regulated by the financial conduct (FCA). He was a Trustee of the security and the corporate Director for the bonds.
Paul Donovan has invested £6,000 in secured energy Bonds photo: Paul Donovan
It all seemed pretty safe, as long as all the participants was that the document the invitation. Solar panels will be installed at schools, so even if there are any problems there would be assets claim. So I went ahead and invested £6,000 in Cebu.
Everything went smoothly in the first year. The trouble began in January 2015, when the fourth interest payment was not made.
I had a sickening feeling that something happened. It grew as an email message to SEB went unanswered and the phone line was dead. Call per capita, which is processed in interest payments, confirmed that they were suspended. But it soon became clear that a large number of funds intended for the provision of solar panels were lost, the Australian parent company, CBD energy. But the Energy of the CBD went into administration in 2014 shortly after SEB.
First chance to meet the other 900-odd investors of the creditors ‘ meeting in April 2015. There was a lot of anger – it seems that we were not going to make a penny back.
Some of us created a mailing list, which quickly turned into SEB investors action group.
Group media and contacted deputies. Investors are advised to start with a reference MRI, and then go to the financial Ombudsman service (fos). This is doubly annoying in September, after learning that Li was again bragging about his role as a Trustee security for another bond issue.
The initial response from the Ombudsman was favorable, indicating that he intended to look at our business in relation to IPM. But then it changed. We did not give up and appealed to the Committee of the Treasury and the FCA. Some investors took the law firm to challenge the Ombudsman and the attorney opinion helped to get him to change his position.
Last year, the FOS decided that the relations of support between investors and ipm, which meant he could look at our complaints. The good news is that the FOS ruled in favour of investors in the two test cases.
It held that the involvement of the IPM was not only Approve documents for a promotion, but that he “had a regular role in the investment scheme” and “of key importance for safety and quality assurance mechanisms” NTS.
It also decided that the security for the mini-bond was flawed“, leaving the security is, in fact, nothing. This was a fundamental flaw and that IPM should be reasonable notice”.
At the time of writing, two tests of investors made the decision, so MRI was ordered to pay. Ipm is not FCA-regulated companies. If he can’t pay, investors are forced to go on the compensation scheme financial services. More delays, but in the end I should see my money back.
It was a long way to come to this point. I can’t deny that in five years I don’t think I will see my money back. Sometimes it seemed that was extended in the hope that investors would refuse to leave.
There are many lessons to be learned from the case, not least the effect of collective action. Was that a small group of investors to come together, I do not believe that we would see our money back. In addition, there should be more regulation in this area, in particular, the Board of Trustees security.
• Money tried to contact IPM for this article, but received no response at the time of going to press