Want to earn 13% risk-free by investing in watches? Time is finally running out at RC Watches: TONY HETHERINGTON

Tony Hetherington is the Financial Mail on Sunday’s top researcher, taking on readers’ corners, uncovering the truth that lies behind closed doors and delivering victories for those left out of their own pockets. Below you can read how you can contact him.

A lying London investment firm exposed by The Mail on Sunday last August has been banned by the Financial Conduct Authority from carrying out activities requiring its approval after City Watchdog investigators discovered it was using a series of false claims to attract people investors and obtains its FCA license.

RC Watches, based in the Hatton Garden jewelery district, offered interest rates of up to 13 per cent, boasting that this was a ‘risk-free investment’, with investors’ money ‘fully asset backed and capital protected’.

Money borrowed from investors would help build the company ahead of this year’s launch of a scheme that would deal in luxury watches such as those from Rolex and Cartier – essentially a unit trust that owns expensive watches instead of shares.

The company was only authorized by the FCA to act as a credit broker, but after gaining approval to do so and getting its name on the watchdog’s public register, it was likely it would also get credit for its planned investment fund.

However, my own research last summer revealed that although company documents named the sole director of RC Watches as Gurpreet Sandhu, he was in fact a 62-year-old dentist from Sanderstead in Surrey, while the real boss at Hatton Garden was his son Timothy . . And Timothy Sandhu, 35, had good reason to fly under the city regulator’s radar after running an illegal stock company seven years ago.

In 2017, The Mail on Sunday sounded the alarm about Incrementum Funding, which floated shares in a luxury watch company called Paragon Time Trading. Paragon collapsed shortly afterwards, costing victims more than £400,000.

Because Incrementum Funding operated without any authorization from the FCA, victims had no access to the Ombudsman or the Financial Services Compensation Scheme. The owner and sole director was Timothy Sandhu, now the real boss of RC Watches.

The FCA has issued a supervisory notice to RC Watches, stating: ‘The Authority has identified serious concerns regarding the company as its conduct appears to demonstrate that it poses a significant risk of harm to consumers.’

Before granting a license to RC Watches, the regulator was assured that the company was not looking for outside investors. In the wake of our report last August, which showed the exact opposite, the FCA immediately challenged the company, which responded that there had been a mix-up on the part of the website provider, who had been working on a similar site for another company.

But to further cloud matters, the FCA was told a few days later that RC Watches and the website offering investments were ‘not connected at all’.

It was suggested that the website may have been a clone posing as RC Watches, and the email added that the company would support a public warning. When the FCA pointed out that this contradicted the previous statement of a mix-up, RC Watches claimed that the statement regarding a suspected clone was an ‘error’.

By then, the watchdog’s own investigators were growing increasingly suspicious. They agreed to meet the company’s alleged boss, Gurpreet Sandhu, on October 2, but a few days before the meeting, his lawyers wrote to him asking questions. A meeting was then scheduled for October 17, but this was also canceled and moved to October 27.

Two days before the meeting, Sandhu’s lawyers admitted that he was not really in charge, saying that “the person running the day-to-day affairs” was in fact Timothy Sandhu.

This exposed the lie told to the FCA when RC Watches applied for FCA approval, claiming that Gurpreet Sandhu ‘solely runs day-to-day operations’. The lawyers then told the FCA that they would attend the October 27 meeting along with Timothy Sandhu, but not his father Gurpreet. The meeting was canceled.

FCA investigators then examined the company’s bank statement and other records and found that, although it denied offering investment, the company had already secured £214,500 from investors. RC Watches had told investors it would use ‘FCA-regulated escrow providers with security administrators for your added security’ – but the watchdog found investors’ money had been paid directly into the company’s bank account, without an external monitor was involved.

Sandhu has also inflated his company’s figures in investment documents, claiming after-tax profits for 2021 were more than £450,000, while the FCA ruled a loss of around £155,000 was more likely. Investors were told that RC Watches had issued £2.7m of shares in the same year, but the company’s bank accounts showed purchases had cost less than £43,000.

What happened to investors’ money? According to FCA investigators, there was “a pattern of investor funds received by the company followed by substantial payments made on the same day or shortly thereafter” to Gurpreet and Timothy Sandhu and to an unnamed third party suspected of a salesman who pocketed a commission of about a third of the money raised.

RC Watches is now prohibited from offering investments or services that require FCA approval. Gurpreet Sandhu and Timothy Sandhu were invited to comment but did not respond.

If you believe you have been a victim of financial misconduct, please write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email tony.hetherington@mailonsunday.co.uk. Due to the large number of questions, personal answers cannot be given. Please only send copies of original documents, which unfortunately cannot be returned.