A former senior director with accountancy firm Wilkins Kennedy has formally apologised over allegations of fraud against embattled property investment firm Harlequin on a website he set up and founded, which included claims the firm was a Ponzi scheme.
Harlequin, whose UK arm entered administration earlier this year, and the family of its chairman David Ames today (4 November) published a joint statement alongside Wilkins Kennedy, its partner Martin MacDonald and former senior director Jeremy Newman announcing an out of court settlement over libel action brought in relation to the now defunct ‘Harlecon’ website.
Earlier this year, FTAdviser revealed that Harlequin had filed a defamation claim in the High Court against its former accountant, Mr MacDonald and Mr Newman over claims made on the website, which was removed from public access in June 2012.
According to particulars of claim for the action filed by Harlequin, Harlecon, which was launched in October or November of 2011, contained myriad “wildly defamatory allegations” relating to Harlequin and stated that the entire business was “nothing but a fraud” and is a Ponzi scheme.
The joint statement states that an agreement was reached for an undisclosed sum and that neither Wilkins Kennedy nor Mr MacDonald had any involvement in the website or its operation.
It adds that Mr Newman admitted setting up the website “and regrets his actions in doing so”, and that he “did not intend to suggest, and has not asserted in these proceedings, that the business operated by Harlequin was in fact a fraudulent scheme”. It goes on to state that Mr Newman “apologises for the offence and upset that the website caused to the Ames family”.
At the time of the libel claim coming to light in May, Mr Newman was said to be “vigorously defending the action”.
Harlequin had stated in the claim that Wilkins Kennedy was “vicariously liable” for the published allegations that were based on confidential documents disclosed on the website. It added that the documents did not reveal any wrongdoing and that the allegations were therefore false and defamatory.
Harlequin subsidiary Harlequin Management Services (South East) Limited, trading as Harlequin Property, entered administration earlier this year. The firm subsequently announced it was working with law firm Regulatory Legal to explore options for restructuring.
This case is not the only legal front on which the firm is fighting - it is also involved in a number of other battles over issues such as project delays and cancellations after investor deposits had been taken, and redress for investors that backed out of investments.
In one case Harlequin Property, alongside Buccament Bay resort and Mr Ames, was the subject of a ruling from a court in St Vincent and the Grenadines in August 2011 demanding that it pay close to £450,000 to five investors that backed out of investments into a resort in Buccament Bay in 2008.
The joint statement published today reads: “The action arose from a website which alleged that the business operated by Harlequin was a fraudulent scheme. The terms of the settlement are confidential, but the offending website has been closed down and will not be reopened.
“Wilkins Kennedy and Mr MacDonald deny any involvement in authorising, approving or setting up the website or its content. Neither Mr MacDonald nor Wilkins Kennedy have asserted in these proceedings that the allegations were true.
“Mr Newman has admitted that he set up and operated the website and regrets his actions in doing so. He did not intend to suggest, and has not asserted in these proceedings, that the business operated by Harlequin was in fact a fraudulent scheme.
“Mr Newman apologises for the offence and upset that the website caused to the Ames family.”
