Are investors set to see millions go pop?
Taxman’s fraud probe into accountancy firm with festival link
HUNDREDS of savers are caught up in a new investing furore after tax officials launched a fraud investigation into an accountancy firm linked to a series of speculative investments.
The Mail on Sunday can reveal that HM Revenue & Customs raided offices of accountancy firm White & Company in Manchester and London as part of the multi-millionpound fraud probe, which began a year ago.
White & Company specialised in introducing investors to opportunities to invest in small businesses via the Government’s enterprise investment scheme (EIS).
Under the scheme, investors can put up to £2million into fledgling firms – which must typically be no more than seven years old, worth less than £15 million and have fewer than 250 staff – in exchange for a 30 per cent tax break.
City sources said White & Company, which was set up and run by financier Ben White before it went into administration in April 2019, helped funnel around £90million into a variety of small businesses.
White was also behind the launch in 2012 of investment firm Ober Private Clients, which was responsible for introducing around £70million of investors’ cash to small businesses.
He was a director of Ober until October last year.
A lawyer representing some of an estimated 300 investors who dealt with either Ben White or companies linked to him alleged that some of the investments had turned sour, leaving investors chasing losses.
HMRC is understood to have intervened after former clients of White & Company and Ober, many of whom are said to be retired or investing for their retirement, took legal action over the investments they were introduced to.
The lawyer for the former clients said in some cases they had been hit with large unexpected tax bills.
Documents linked to White & Company’s administration confirm that HMRC decided the firm claimed tax relief ‘prematurely’, although details of the inquiry remain unclear.
The White & Company administrator’s report reveals the probe by HMRC’s Fraud Investigation Service ‘generally had a very serious commercial impact on the firm’.
The HMRC raids on White & Company took place in June 2018 at its state-of-the-art offices in Manchester, and in London where it appeared to share offices with DJ Pete Tong and several music firms.
These included Fusion Festivals and Events, which runs an annual weekend event in Liverpool, Fusion Festival, that this year is featuring Little Mix and grime rapper Dizzee Rascal.
Until last year, White & Company was the accountancy firm for Fusion Festivals. Crown Talent & Media Group – which lists Fusion Festivals as one of its brand partnerships and was based in the same building in Manchester – is among the former clients taking legal action against White & Company. The talent agency, which counts singer Ella Henderson as a client, and Fusion were also among the investment opportunities promoted by Ober. Other Ober investment opportunities include Osea Island & Events Limited and Fairytale Films Limited, set up to create a movie on Pogues singer Shane McGowan.
Directors of Ober are understood to be set for talks this week with clients about whether HMRC will deem Fusion, Talent & Media Group, Osea Island & Events and Fairytale Films eligible for EIS tax relief.
There is no suggestion of any wrongdoing by Ober, Fusion Festivals, Crown Talent & Media Group or Fairytale Films Limited or any connection between these companies and the HMRC investigation into White & Company.
Sources said the Financial Conduct Authority is ‘monitoring’ the situation at Ober Private Clients.
News of the probe into White & Company and scrutiny of the complex web of companies involving White follows several high-profile scandals in the investment industry that have wreaked havoc with people’s life savings.
The list includes fund manager Neil Woodford’s move to stop clients from removing cash after a series of bad bets, and the collapse of investment firm London Capital & Finance, which has put £236million of customers’ money at risk and is being probed by the Serious Fraud Office.
Accountants White, 43, and his exwife Emma Abbott-Rattray, 41, set up White & Company in 2008 and had 25 staff at the end of March.
White owns a £1.2 million mansion in the upmarket Cheshire village Prestbury, whose residents have included football stars such as Wayne Rooney. Michael Levy, a barrister acting for clients taking legal action, said: ‘Two years ago when I started investigating on behalf of my clients, I was not prepared for the scale and scope of the chaos that this has caused.
‘Some of my clients will be able to recover. Many will not.
‘I issued proceedings for my clients a year and a half ago. I know that Ben White blames me for the downfall of White & Company, but I have only claimed the losses that my clients suffered.’
Ben White claimed the administrator’s report was not accurate and that the HMRC fraud probe is in fact into one of White & Company’s American clients, not White & Company itself. Ober was unavailable to comment.