‘Why are you still calling me?’ asks boss after new illegal sale
Probes a world of scams and scandals
M.R.writes: I am writing about your article on Paragon Time Trading last Sunday. I was contacted by Daniel Knight of Incrementum Funding, who over a few days persuaded me to invest £6,000 in Paragon shares on the promise of an imminent dividend of £135, which did arrive. More calls followed and I parted with a further £9,000. (Yes, I know. How stupid). I have been invited to invest another £81,000 but have informed Paragon and Incrementum of my intention to cease investing. I have also been in touch with the Financial Conduct Authority and was advised that this had the hallmarks of a scam that I should report to Action Fraud.
AFTER last Sunday’s investigation, you now know that Incrementum Funding is a trading name used by a company called IFRC Consultants Ltd, registered to an address in Croydon, South London, though it actually operates from offices in Lower Thames Street in the City.
You are in the same position as the reader whose letter we published last week. You should never have been offered shares in Paragon Time Trading Limited. This was simply illegal.
Paragon says it is raising £1.8 million by issuing shares at 60p each. The proceeds are supposed to pay for luxury watches that the company will rent out to customers to wear on special occasions.
Weekday hire costs £220 to £2,500, or up to £5,000 at weekends. Annual membership offering a selection of posh watches is set at £2,500 to £275,100.
The snag is that Incrementum is not licensed by the Financial Conduct Authority to sell shares to anyone. Shares in high risk ventures can be offered to professional or sophisticated investors and to wealthy individuals who can afford to gamble. But you are not in any of these legally exempt categories.
You are a pensioner in your seventies and Incrementum never even asked about your personal circumstances, except to take a sudden interest when you mentioned you were considering equity release to unlock capital from your house.
You were thinking of holidays or a new car. But Incrementum wanted you to borrow against your home and stake more than £80,000 on Paragon shares with no stock market listing and no easy way to turn them back into cash.
It is not even clear whether the £135 you received was a genuine dividend, based on trading profits, or your own cash, trickled back to encourage you to part with more.
Deals like this cannot be enforced. They are unlawful and, under the Financial Services & Markets Act, you are entitled to your money back.
I asked Incrementum boss Timothy Sandhu – also based in Lower Thames Street in the City – what he intended to do about this. Last week he assured me that his company is ‘only marketing towards angel investors, high net worth individuals and sophisticated investors’.
This was not true last week and it is not true today. The only change is that this week Sandhu has offered no comment or explanation.
I also asked Paragon’s owner Richard Ludgate whether he would refund you. I enquired why you were asked to pay your initial £6,000 by personal cheque to him rather than to the company.
Ludgate has allocated himself three million shares at no cost, though I am sure he will see that your cash ends up in costly watches for his company. His response was to tell me: ‘I cannot believe I am receiving further communication from you.’
He added that it would be ‘unfair’ to comment ‘before establishing the facts’.
Well, unless lightning strikes twice, the facts are plain. Incrementum acted unlawfully, just as we reported this time last week. You are legally entitled to your money back. But unless Ludgate coughs up voluntarily, it looks as if you may have to sue to get it.