In a statement, Harlequin said the survey released on Monday by Regulatory Legal Solicitors “covers less than 5%" of the purchasers of properties through Harlequin Management Services (South East) Ltd (HMSSE), the UK sales arm of the Harlequin luxury property development company.
Published estimates are that around 3,000 UK investors spent as much as £300m on deposits in the Harlequin properties that were planned for various sites in the Caribbean and other resort locations.
The Harlequin statement went on to add that “we have seen no evidence that they [the survey’s respondents] are in fact Harlequin purchasers”, and continued:
“It is disappointing that [Regulatory Legal] is yet again seeking publicity at a time when Harlequin is focusing on restructuring the business for its investors.”
As reported, Regulatory Legal said that almost all of the 292 investors it surveyed – or 95% – were never told that if they were unable to pay the balance on what they owed on completion of the project, they could end up in default and lose their deposit.
HMSSE is currently in administration.
A Harlequin spokesperson said that the company would comment separately on the findings contained in the joint administrators’ report, also released on Monday.
Financing
One of the issues for investors has been the way that many were convinced to buy Harlequin properties through a scheme which helped them with the financing, but subsequently collapsed when the business began to run into problems.
The Regulatory Legal survey released on Monday found that 96% of those surveyed said they had relied on the financing being “guaranteed”. In its response today, however, Harlequin maintains that financing had always been “promoted as ‘subject to status’”.
It went on to say that in spite of Harlequin’s “best efforts” to date it has proven “extremely challenging to put the intended finance in place, due to the global recession and other factors”, including what it said was a “defamatory campaign” by a former accountant.
Progress cited
In its statement today, Harlequin suggested that there was some progress being made towards finding a solution to its financial problems.
“We cannot disclose specifics due to confidentiality, but Harlequin has been involved in discussions with a number of Caribbean banks and other institutions,” it said.
“While finance has not been forthcoming to date, Harlequin continues to pursue it."
It also said it was seeking to accommodate investors who were unable to provide the money needed to complete the purchase of the properties they had committed to, saying: “Completions are a contractual obligation upon delivery of the finished property, and are essential for Harlequin’s progress; however, we are aware that, due to changes in their own financial circumstances, some clients are wishing to delay their completions, so they are being moved to properties with later completion dates.”
As previously reported, Harlequin’s problems began in January when the UK’s Financial Services Authority issued an alert on Harlequin after it became concerned with the high number of SIPPs invested in the company’s developments, and followed this up in March with a written request to providers of self-invested personal pensions (SIPPs), asking them to say whether they had any clients invested in the company.
Harlequin is meantime involved in a costly court case with investors in the UK, who are fighting for the return of around £500,000 they put into the company’s Buccament Bay Resort in the Caribbean.
HMSSE was put into administration at the end of April, in the wake of news about the court case and reports that the UK’s Serious Fraud Office and Essex Police were investigating the business.
