The £20,000 bail that’s no better than a man’s IOU in a pub: TONY HETHERINGTON

Tony Hetherington is Financial Mail on Sunday’s top investigator, fighting readers’ corners, uncovering the truth behind closed doors and securing victories for those left empty-handed. Find out how to get in touch below.

RF writes: I sent a certificate to Cauta Capital for the redemption of a £20,000 bond that I bought in 2018. Interest was also due, but I have not received anything.

Tony Hetherington responds: I have bad news and worse news I’m afraid. The bad news is that you are not alone and the claims against Cauta Capital Limited are increasing.

The bad news is that I can tell you that the company declared bankruptcy last Monday, although it has not yet informed you.

In April I warned that things had gone terribly wrong. Your money would be lent to other companies as project financing, but only if those companies pledged their assets as collateral, and only if the value of the project was much greater than the amount of Cauta’s loan.

It all seemed safe. When the bonds were offered, Cauta Capital’s accounts valued the company at £69m. The most recent accounts from 2022 showed the company owed £11m – largely to bondholders like you – but this wasn’t a problem because it still owned assets worth more than £19m.

Then came complaints from investors whose bonds had matured but had not yet been paid. Strangely enough, they were told that Cauta had invested their money in emeralds that had to be cut and polished before they could be sold.

I interviewed the company’s sole director, William Abundes, an American living in Luxembourg, where he is known for his political campaigns on behalf of Donald Trump.

He said: ‘The move into gemstone trading, particularly emeralds, was a strategic decision in response to unexpected losses the company incurred following an investment in a European real estate project.’

Abundes did not provide details. And now his company has presented its 2023 accounts, and they border on the unbelievable. They are identical to the 2022 accounts down to the last cent.

They ignore the interest investors will still have to pay in the coming year and value the company’s assets – including emeralds – at exactly the same amount of £19,412,876 as a year earlier.

When Abundes put his debt securities up for sale, he appointed accountant Graham Arnott as an independent trustee in the UK to legally manage his company’s assets and protect investors.

Arnott told me: ‘We requested the copy and paste invoices and were told that the value of the gems would not have changed much, if at all, as they were in raw form and accrued interest had not been taken into account.’ On Monday, Abundes placed Cauta Capital into administration, overseen by Adam Price and Lane Bednash, both of insolvency practice CMB Partners UK.

This won’t stop with bankruptcy, but bondholders are unlikely to find out more until the administrators have completed their investigation and written to them, which will take about eight weeks. Adam Price told me: ‘Based on the information currently available to the joint administrators, the company’s only asset appears to be a stake in a Luxembourg-based investment fund.’

It is unknown whether this fund owns the company’s emeralds.

Meanwhile, bondholders are left in the dark. A retired couple who put some of their savings into Cauta Capital told me: ‘We have worked hard to save money during our working lives and are sad that we have lost some of it in this way, but we are much sadder that we have lost trust in the honesty and integrity of some people.’

Bonds are only lightly regulated in the UK. We need investor protection rules that raise them above their current status of being no better than an IOU from a mate in the pub.

Battle with Churchill over missing accident report

I contacted Churchill about your accident and three days later the insurer wrote to you to apologise

PF writes: A year ago we were at church in West Yorkshire when a stolen car hit our parked car, causing it to be written off. The driver was arrested. I was delighted when our insurer Churchill quickly paid the claim, minus our £200 excess. I was told the excess would be refunded once Churchill received a police report. But then an email arrived from Churchill saying: ‘We are unable to obtain the third party registration number from the police via their online form as it says ‘Sorry, we can’t find the page you are looking for’ under Merseyside Police.’

Tony Hetherington responds: I am not surprised that Merseyside police were unaware of the crash, given that it occurred in West Yorkshire. It appears that Churchill confused a postcode in Wakefield with both a postcode in Warrington and a postcode in Worcester. Worse still, what followed was the bombshell doubling of Churchill’s renewal fee.

During months of contact with Churchill, you visited the police and saw that the accident report was ready. The police told you that Churchill had been informed last year that the investigation was still ongoing and that they would have to resubmit an application shortly, but the police heard nothing more.

I contacted Churchill and three days later the insurer sent you a written apology, blaming the incident on an external company they had hired to liaise with the police. Churchill sent you £750 to support their apology, but they still could not access the accident report.

Churchill then wrote: ‘We have received correspondence from third parties who cannot deal with us. We have now responded that as RTA insurers it is their responsibility to pay the claim of the innocent party. If there is no response or if they still refuse, we may have to take legal action in the future.’

I’ve corrected the spelling, but I still wonder if this is a bad translation from a foreign language. Klingon perhaps? Unfortunately, it’s a real letter from a major insurance company.

Churchill has finally got the police report. It has reduced your premium and refunded £113 plus the £200 excess, and frozen this year’s premium. Churchill attributed your years of struggle to ‘unique circumstances’.

I hope the way the company handled your claim is just as unique.

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 volume of enquiries, we are unable to provide personal responses. Please only send copies of original documents, which we regret we cannot return.