Risky bond turns sour: Energy Bonds promising 6. Read this: Risky bond turns sour: Energy Bonds energy stocks to invest in 2015 6. 5million worth of savers’ cash after promising interest rate returns of 6. 5 per cent from adding solar panels to rooftops has turned sour.
The spin said it was a ‘secured mini-bond’. At the time of launch, This is Money warned the bonds were potentially risky, with one expert labelling them as ‘inappropriate for the majority of retail investors. This is Money’s investigations have revealed a tangled web behind the bond, with its Australian parent company having gone bust. It looks unlikely that UK investors will now see the promised returns or their money back. Details in the Australian administrators report indicate that money from the energy bond that was meant to be used for solar panels was instead siphoned off by the parent company. This is Money tried to contact the UK arm, CBD Energy Ltd UK, using the phone number on its website, but it no longer works. The site continues to advertise an upcoming bond.
Investors become aware of a problem when the latest quarterly interest payment, due on 26 January, was not paid. One investor contacted Capita Registrars, who handled the bond issue, and was told Secured Energy Bonds suspended using its services in December 2014. A Capita Asset Services spokesperson told This is Money: ‘In December 2014, Capita Asset Services stopped providing services to Secured Energy Bonds Plc and is not in control of payments made to bond holders. At the start of the contract with Secured Energy Bonds Plc, standard due diligence was carried out.
According to a document from Australian administrators at Grant Thornton, which is handling the wind up of CBD Energy, money has been sucked out of Britain and used to pay debt Down Under. It compared it to a number of bonds that had become available at the time from companies such as Hotel Chocolat, Mr and Mrs Smith and the Jockey Club. The prospectus eveb criticised these bonds for failing to provide any ‘real security’ for investors. Because it had IPM on the board, it claimed the investment would enjoy a level of security not previously associated with the mini-bond market, and labelled this a step forward. It says: ‘During 2014, CBD utilised funds of Secured Energy Bonds Plc, a UK subsidiary, which were segregated and should have only been used for the purposes outlined in the bond raising prospectus which precluded working capital funding of CBD. 4million was transferred to CBD over time, via various inter-company loans to fund outstanding creditor payments and working capital requirements.
5million into the bonds, will see their money again. The Secured Energy Bond was sold with the promise that it would fund the installation of solar panels, including on school buildings. An insider said that that of the 22 schools that were meant to receive solar panels, just five have had the work completed. Financial Conduct Authority-backed London firm – which it said would ‘verify all of the documents and communications that you will be given. It added: ‘This process ensures that the material that an investor bases his decisions on are fair, non-misleading and are a good basis for delivering the expected returns and security.
Secured Energy Bonds has selected IPM, that has both the experience in the renewable market as well as expertise in conducting high quality research and managing money for investors. This provides a more stringent test of fairness and deliverability. Even further, IPM will be a corporate director ensuring that the initial stringent test of fairness continues throughout the term of your investment. This made the bond ‘secure’, the prospectus said.
Investors were told: ‘As this is an unregulated market, the company has also appointed an FCA regulated company to sit on the board of SEB, and act in the investors’ interest as a “security trustee”. This is Money attempted to contact Independent Portfolio Managers director Antony Curtis but he has not responded to calls. This is Money warned the eye-catching rate came with substantial risks. 50,000 of investors money if a regulated scheme goes bust.