My ‘investment’ in gold really has turned to dust . . .
J.S. writes: I joined Zen Gold, investing £100 per month. Of this, £25 was a membership fee, £25 was commission to the person who introduced me and £50 was for gold, to be stored by the company. I was then offered for £10,000, a directorship of the company, a guaranteed 24 per cent yield, and my money back after three years. I accepted. At a meeting, Zen’s directors Derek Higgins, Steven Grey and Barnaby Milbourn tried to persuade me to invest a further £100,000, saying they already had 1,200 investors paying £100 a month each. I declined. My three-year investment period is over so I requested my £10,000, but Mr Milbourn says Zen Gold Partners Limited has been dissolved. In return for all my monthly payments, I have been sent 31 grams of gold. All financial dealings were with Mr Milbourn but he now says this is nothing to do with him and I should contact Mr Higgins. I have a share certificate, but I am wondering whether I was ever really a director. ZEN Gold has the hallmarks of a pyramid scheme dressed up to look like an investment. The real money lay in recruiting ever more people, and not in speculating on a rise in the value of gold.
The closest Zen Gold seems to have come to genuine business trading was the installation of a slot machine at a shopping centre in West London. The machine sold small pieces of gold, but The Mail on Sunday warned in 2011 that a test purchase for £47 yielded a wafer-thin sliver of the precious metal, valued independently at £24.
Zen’s written sales pitch to investors offered a long list of benefits that simply failed to appear. There should have been a monthly magazine, marketing leads, and even discounts on travel and insurance – none of which you received.
Your doubts are justified. You never were registered as a director of the company. Worse still, the certificate you received is for 10,000 shares of £1 each in Zen Gold Partners Limited, but records filed at Companies House show you held only two £1 shares. Confusingly, you were later given another certificate for 20,000 shares, but in fact there were only ever 1,100 shares in existence for the entire company.
You have told me that you made 31 payments of £50 for gold, for which you were finally sent 31 grams. This is odd in itself. The price of gold varies daily, so logically some months would have seen you entitled to a little more gold and some months to a bit less. But however you calculate it, you have incurred a massive loss, and your £10,000 for a stake in the business has disappeared completely, with the company being dissolved in May last year and nothing to show what happened to the 1,200 people who were supposedly investing through it.
You have told me that you paid your £10,000 to Barnaby Milbourn. However, when I finally managed to contact him a few days ago he told me he had never made any of the claims that his company advertised. He said: ‘I do know the name JS, but he wasn’t my client, and I wouldn’t be able to tell you whether he was told those things or not. If he was told them, it was a lie.’
So what happened to the £10,000? Milbourn told me: ‘I don’t know. It never went to me.’ Although he still describes himself on the internet as a director of Zen Gold, offering savings and investment plans backed by precious metal, he said he could not explain how you came to be issued with more shares than ever existed. The other two Zen directors did not respond to invitations to comment, but I was surprised Milbourn did not seem to take the matter more seriously. You see, he now says he runs a business called CALM Legal, carrying out fraud investigations for solicitors, using former government agents trained in surveillance.
If this is the case, perhaps his own employees can explain to him how your share certificates show what is purported to be his signature, issuing you with more shares in Zen than have ever existed. Or perhaps it might be more fruitful if you were to hand over all these details to the police.