More than £27 million of the £80 million raised from investors by the Cayman Islands-domiciled Centaur Group may have been misappropriated by insiders, according to the Joint Provisional Liquidators.
The “key beneficiaries” of “irregular transactions” from August, 2011 to March, 2014 appear to be Scott Williams, nationality unknown, who is believed to have “at least one previous criminal conviction for unlicensed securities trading”; “his associate” Duane McGaw, a citizen of Canada; and, “to a lesser extent”, Brendan Terrill, a United Kingdom national, all of whom “have not accepted the opportunity to present themselves and provide an explanation” to the JPLs.
Another major beneficiary of investors’ funds was British Virgin Islands-domiciled Orion Litigation Intermediaries Limited, which received £8.9 million or 11% of total funds raised as “introducer” for investments, stated the JPLs. Orion’s Managing Director is Christopher Keats, a New Zealand national, “but Mr. Williams is believed to have previously been involved with Orion”, it was claimed. These payments appear to be “in line with the stated commission”, stated the JPLs, implying they were legitimately received. Notwithstanding the amount it has received for its part in the fraudulent investment offering, Orion claims the Centaur Group is “currently indebted to them for outstanding commission”.
In other bad news for investors and creditors, none of the third-party lawsuits funded by the group have been successful and purported insurance protecting against unsuccessful cases and guaranteeing investors’ principal and fixed returns either did not exist or was placed with “hollow” insurers, including Royal Luxembourg Soparfi SA, of Luxembourg, it was claimed. Much of the allegedly sham insurance was placed by British firm 1st Class Legal (IS) Limited – managed by Robert Gordon, of Shrewsbury, England, which received £47,038.
The grim details were contained in today’s first report to creditors and investors by Said Jahani, Hugh Dickson, and David Bennett, of Grant Thornton’s Australia, Cayman Islands, and Hong Kong operations, respectively, as JPLs of Centaur Litigation Limited, Centaur Litigation SPC, and Centaur Litigation Unit Series 1 Limited, all domiciled in Cayman.
The JPLs stated they were “not yet in a position to provide an estimated return to creditors and investors” because of the uncertain status of funded lawsuits and “the poor quality of the Companies’ books and records”. Attempts to reconcile the group’s accounts “have been frustrated by a lack of cooperation” from the group’s administrator, The Hong Kong Trust Company Limited, of Hong Kong, claimed the JPLs.
The JPLs stated they have received “expressions of interest from two parties regarding a proposed recapitalization” of the Centaur Group, one from Australian firm Dequity Partners, which is owned and operated by Stuart Hackett, Simon Franklin, and Klaus Selinger, and another from Doppler CFI Limited, which research by OffshoreAlert showed was incorporated in England and Wales only 18 days ago with a capitalization of just £1 and is owned and operated by Stuart Cotton, of Wiltshire, England.
“The JPLs are not involved in the recapitalisation process, nor will they be at a later date,” they stated in their report. “The third parties proposing the recapitalisations are doing so on their own initiative.”
Hackett, Franklin and Selinger were involved in the Centaur Group and/or its affiliate, Buttonwood Legal Capital, for several months before the former went into liquidation in Cayman on June 27, 2014 – four months after being exposed by OffshoreAlert. The report by the JPLs showed that, from January, 2014, the trio received a combined AU$1.3 million (approx. US$1.2 million) in fees and expenses, adding: “To date, we have not identified any obvious transactions suggesting impropriety or misappropriation of funds by Messrs. Selinger, Franklin and Hackett. We are aware of a number of allegations by association through the management transition with Messrs. Terrill and Williams that there may be concerns from investors.”