Axiom Legal Financing Fund: The Lunacy Continues

    In a letter to investors today, Axiom’s directors stated that: “We would encourage any party who has evidence as to wrongdoing with respect to the Fund to provide that information to the appropriate authorities.”

    Yet, over three weeks ago, OffshoreAlert provided the directors with audio recordings of David Rae, Andrew Walsh, and Dale Stephenson, who is Tim Schools’ step-son, discussing, inter alia, that the biggest borrower owed the Fund £50 million but had run out of operating cash, that the borrower would still continue to receive “priority funding” if it continued to make payments to insiders, notwithstanding its hopelessly insolvent position; sending money to fund cases to one law firm but sending the actual cases to another, and, against a backdrop of laughter, sending a doctored document to the Fund’s auditor, BDO Cayman. What more do they want? A video, perhaps?

    Axiom’s directors also claimed that: “There have been a number of serious unsubstantiated allegations made against the Fund and its service providers in the press.” Are you kidding me? I’ve seldom had so much evidence to substantiate such serious allegations. OffshoreAlert’s allegations are substantiated, not unsubstantiated.

    Also, in its letter to investors, Axiom’s directors emphasized that the firm they had hired to look into the Axiom group, KPMG, had not been previously engaged by the Fund’s investment manager, Tangerine Investment Management, to conduct work on its behalf and, therefore, was independent and did not have a conflict. This was a reference to a report in OffshoreAlert that KPMG had been asked by Tangerine Investment Management to conduct an audit of TIM, that the project had subsequently been abandoned but that KPMG had still been paid CI$4,500 for its time. OffshoreAlert now accepts that KPMG was not paid CI$4,500. However, we do not believe we were far off the mark. A source close to the Axiom group is adamant that Tangerine Investment Management was prepared to pay KPMG for its time in considering the project before it was abandoned, that KPMG had discussed the possibility of being paid CI$4,500 but that no such money was subsequently paid. KPMG denies that it ever asked for CI$4,500 and, on this matter, we will agree to disagree. “KPMG was approached by Tangerine Investment Management Limited to provide a quote for audit services. However, this never progressed, we were never retained, we did not complete our client acceptance procedures nor were we paid any monies,” KPMG’s Kris Beighton told OffshoreAlert.

    Finally, every day that goes by without Axiom being put into liquidation is another day that insiders have an opportunity to move assets around and remove evidence. There is no excuse for the delays that are taking place. The directors are simply compounding their prior mistakes and have shown that they are simply not up to the task of being directors of anything that is funded by other people’s money. Investors need to boot them out and appoint their own representatives to begin to clean up this mess.


    • Andy Quinlan
      FAO David Marchant


      Sent you a two page insiders report which I feel you find illuminating. Went to Sonia at Press Desk, and a copy ended-up in Naomi's email too !

      Director of Funds , AMC, and Corporate Law. 10 Yrs authorised by all IOM, Guernsy
      • mm
        David Marchant
        I have not received this (and we don't have any employees called 'Sonia'). Please resend to, which is my direct email address.

    Leave a comment