Roof caves in on property swindle
High Court shuts smug pair’s £20m empire to protect public
A STRING of property investment companies that I’ve exposed has been shut down by the High Court in the public interest.
I first warned about the Magna Global group of companies in June last year after hearing from one distraught investor who’d sunk his life savings into them before repayments suddenly stopped and he could not get his money back.
Now an Insolvency Service report has detailed how the companies raised £20million through selling “loan notes”, which were supposed to come with impressive returns.
The report details how the two directors continued to take investors’ money even after the companies were insolvent.
Those directors are an unusually smug pair, Christopher Madelin, 36, and 34-year-old Oliver Mason.
Before he deleted it, Madelin declared on his Facebook page that he was a “Leader, Visionary, Multiple business owner, Real Estate Developer, Entrepreneur, Supercar enthusiast!”
Mason meanwhile claimed how he “has been personally responsible for closing over £400million of transactions in the last five years”.
Magnagroupglobal.com, their website, which is now unavailable, boasted: “Through well-planned and beautifully executed developments, we deliver outstanding results for our stakeholders.”
They’re certainly outstanding, though not in a good way.
One investor told me how he put £950,000 into two companies in Magna Global group, Magna Investments X Limited and MIX2 Limited, after being promised returns of 12% to 18%.
The investor, who does not want to be named, said: “The interest payments stopped in April of last year without explanation, however, they continued to claim that their business is doing well.
“As a matter of fact, until recently they were trying to convince me to invest even more.”
That chimes with the Insolvency Service report published this week.
“Marketing and publicity material circulated to investors presented a false picture of the group’s strong financial health,” says chief investigator Edna Okhiria.
“The companies induced investors to invest over £2million after December 2019 at substantial risk, with the knowledge it had stopped repaying existing investors therefore there was no reasonable prospects of repaying these sums. “Investors in the MIX companies were systematically given false comfort that their investments were to be ‘asset-backed’ by tangible ‘bricks and mortar’ security when in reality this was not the case and highly misleading.” A case in point was the derelict Rat and Parrot pub in Woking, Surrey, which investors were told was to be developed into a 30-storey mixture of commercial units and flats.
Magna Global claimed that it had acquired the pub but later wrote to investors to explain that it was “very sorry” to admit that a third party had exchanged on the site and it did not have any “viable plan” to repay the loan notes.
One investor told me: “Magna have said they have lost sites and projects at the beginning of the process, not in the middle nor at the end, so it is very unclear how they could have lost all the money raised.
“We don’t know where all the money has gone.”
The answer to that lies, at least in part, in the Insolvency Service report.
“Madelin and Mason, having secured deposits from investors, are believed to have been the beneficiaries of £2.5million through director loan accounts,” it reads.
It goes on to say that during one three-month period alone the pair paid themselves £425,021, with a further £370,471 being lent to an overseas company they owned.
The Official Receiver has been appointed liquidator.
Investors got a false picture of its strong financial health