Scrutiny into an overseas property company is continuing as self-invested personal pension (Sipp) providers who allowed it as an investment justify their actions.
Harlequin Property, a UK-based overseas property sales agent, has come under the FSA’s microscope following hefty investment weightings through Sipps.
On 18 January, the regulator issued an alert to advisers over recommendations to invest heavily in products with significant holdings in Harlequin, adding that it had seen an increase in the number of Sipps primarily invested with the company.
Money Management has previously covered advisers’ concerns around a pitch email sent by Harlequin offering “the chance to earn a considerable amount of commission”. Harlequin defended its action at the time, saying the pitch was not targeted at financial advisers.
The FSA has since demanded that Sipp firms reveal their exposure to the property investment company. A notice on 1 March required all providers to either respond within two days confirming they had no exposure or reply within five days providing a detailed breakdown.
The Serious Fraud Office is also taking an interest, calling for those who have transferred their pension into overseas property developments operated by the company to come forward.
Law firm Regulatory Legal is representing a number of investors holding Harlequin investments through their Sipps and has demanded information from providers around what safeguards were in place.
A number of providers have confirmed that they have investments in Harlequin. Hornbuckle Mitchell said it met due diligence requirements when it accepted investments into the company but stopped accepting them in 2011.
Curtis Banks and The Lifetime Sipp have also said that they hold investments in the property company.
TailorMade Alternative Investments, part of the TailorMade Group, said it was halting investments into Harlequin and was seeking answers on behalf of its clients.
