The sole director of collapsed wine investment firm Bordeaux UK has been banned from boardrooms for close to a decade after his accounting of millions of pounds of investors’ money was found to be a ‘mess’.
Former lift engineer-turned fine wine trader Ian Vanderhook cannot direct, manage or control any company until 2022, the UK Insolvency Service said.
Its investigation follows Bordeaux UK’s collapse into liquidation at the end of November 2011.
The company, which specialised in Bordeaux – selling both en primeur and bottled wine – is estimated to have owed more than GBP10m when it went under. But, it had only GBP1.7m-worth of wine available and had taken at least GBP23m from investors between October 2008 and its collapse, the government body said.
However, the exact figures are likely to remain a mystery. Bordeaux UK’s accounts were described as a ‘mess’ and liquidator Nedim Ailyan called the situation a ‘mismanagement on a colossal scale’.
‘In my experience the books and records were completely inadequate and we were unable to ascertain the level of creditors due to deficiencies within them,’ he said. ‘As an example we have instances of wine that was allegedly allocated to individuals but there is no record of the wine being transferred.’
Bordeaux UK’s demise came as the UK Financial Services Authority (FSA) began examining whether it should take a tougher stance on so-called unregulated collective investment schemes (UCIS).
Earlier this year, one of the FSA’s successors, the Financial Conduct Authority, issued new guidance banning financial advisers from promoting UCIS to general retail investors.
Miles Davis, a partner at Wine Asset Managers (WAM), told decanter.com that there is a world of difference between companies like Bordeaux UK, which are unregulated and often rely on cold calling to get clients, and companies like WAM, which use professional administrators to manage funds that are FCA-regulated. He said WAM has never been allowed to market to general retail investors.
‘Because they are unregulated, schemes such as Bordeaux UK are able to call themselves “investment companies”,’ Davis said. But, he said such companies ‘don’t actually offer funds or UCIS’.
Under FCA guidance, anyone remains free to invest in what they choose, but investments falling into the UCIS bracket should only be marketed to ‘sophisticated investors and high net worth individuals’. Decanter.com understands that high net worth individuals are defined as those earn more than GBP250,000 (US$400,000) annually.
This article was updated on 06/11/13 to include comments from Miles Davis.
Written by Chris Mercer