Luxury watch hire firm is a ticking timebomb
P.S. writes: I wish I had seen your excellent articles on Incrementum Funding and Paragon Time Trading earlier. My mother has dementia and my brother and I are investing the proceeds of selling her flat in order to help with care home fees. In July, I was called by Incrementum and told that any capital invested was assured because shares in Paragon were backed by an equal value in luxury watches. We invested £40,000 – but it gets worse. When we returned from holiday in September, another Incrementum salesman called to say Paragon was in talks to be bought by a Dutch firm. We were offered a higher dividend, and we invested another £25,000. Now one Incrementum phone number is unavailable and the other is unanswered, and nobody answers the phone at Paragon either. IT WAS only a matter of time before this dubious scheme to rent out luxury watches hit big trouble. I warned twice in August that IFRC Consultants Limited – which calls itself Incrementum Funding – was not licensed to sell shares to the public, and that serious unanswered questions hang over Paragon Time Trading itself.
Incrementum should be authorised by the Financial Conduct Authority in order to market shares. But there is a legal exemption for firms that only deal with ‘sophisticated investors’, people who are experienced enough to judge the risks – or well off enough to stand any losses. As it happens, you and your brother are experienced investors, and fairly well off, so this is one legal trap that Incrementum has sidestepped this time. But none of this means you can be given false or misleading information to persuade you to invest.
Paragon’s owner, who stands to make a fortune if the company raises the £1.8 million pricetag placed on its shares, is Richard Ludgate. But according to Ludgate, there is a second director, Samuel Tyler.
The share prospectus says: ‘Samuel is responsible for driving membership, affiliate partnership, and strategic partnership sales.’ He has, it claims, ‘run a successful company within IT and marketing for the last six years.’
Oddly though, Companies House has no record of Tyler as either a Paragon director or shareholder.
A letter issued to prospective investors over Ludgate’s name says: ‘Due to my own previous client base and private networking, we have currently secured members for 60 per cent of our membership packages.’
This is remarkably successful for a fledgling business. These packages are priced at between £ 2,500 and £ 275,100 a year, giving members access to top of the range watches for special events or just for everyday wear.
Yet you have told me that when you challenged Ludgate, he told you most of his company’s business is shortterm hiring to customers who want a posh watch for a one-off weekend event, with little by way of long-term membership.
You also have real doubts about Paragon’s marketing page on Facebook, which appears to have more than 2,600 people ‘following’ it. Again, a remarkable success for a tiny new company.
Of course, Paragon did not sell its own shares. Sales were made by the separate Incrementum Funding, run by Timothy Sandhu. When I exposed one of its salesmen, Spencer George, as a previous pusher of dodgy carbon credit investments, Sandhu dumped him.
But this does not explain Incrementum’s illegal sales to unsuitable investors. Nor does it shed any light on talk of an offer from a Dutch firm to buy up the whole of Paragon, with a price of 85p a share quoted to you in the second sales call you received from Incrementum. With the shares on offer right now at 60p apiece, why on earth would Sandhu or Ludgate carry on selling them if they could rake in 85p just by holding back a while?
I put all these questions to Ludgate and Sandhu, but neither has offered any comment or explanation. You have told me that Ludgate agreed to repay you more than a week ago, but as The Mail on Sunday goes to press, no refund has arrived, and no dividend either.
The blunt fact is that Paragon shares have been sold illegally to unsuitable investors and with false claims. It is the job of the Financial Conduct Authority to investigate what it calls ‘perimeter issues’ – people acting as brokers, bankers and so on, without permission.
It is now a month and a half since The Mail on Sunday exposed Incrementum’s unlawful activity. The regulator told me: ‘We will take action whenever there is sufficient evidence of misconduct.’
But it refuses to say whether it considers the evidence published here is ‘sufficient’ to justify an investigation. Yet what use is a watchdog that will not leave its cosy Canary Wharf kennel? It looks increasingly as though you and your brother will have to sue to recover your mother’s money. If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.