HITTING THE SKIDS WITH RENTAL CAR
Oddest email of the week came from Reginald Larry-Cole.
I’d told last Thursday how his company Buy2LetCars Limited was trying to recruit investors with promises of 27% returns.
The company is owned by Raedex Consortium Limited which, as my piece explained, is £10.9million in the red, something that might concern new and prospective investors.
It had also advertised for new investors without warning that your capital might be at risk, something it blamed on “a recent graphics update”.
“Maybe your article on Thursday needs a follow-up,” Mr Larry-Cole later emailed me.
I can only imagine that he was being sarcastic, given that the follow-up is the news that the Financial Conduct Authority has now banned Raedex Consortium from recruiting any more investors “because of concerns about its finances”.
Although Raedex is regulated by the watchdog, the investments bought through Buy2LetCars were not, meaning investors have no recourse to the Financial Services Compensation Scheme.
“As these investments are loan agreements (as opposed to a liquid investment in marketable securities, for example) it is unlikely that investors will be able to exit,” says the regulator.
“However, as investors have entered into unregulated fixed term loan agreements with differing terms, they should speak to Buy2LetCars Ltd for further information.”
The business model was to use investors’ money to buy rental cars which generated income when leased to people with poor credit histories.
Raedex co-director Scott Martin assured me last week: “Our commercial environment remains sound and we will be here to serve our clients for years to come.”