CompaniesJan 30 2013

Harlequin grapples with accounting problems

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Harlequin is an international property investment agent with interests in overseas hotels.

The alert, directed at regulated firms and not at Harlequin, said advisers should consider how building work is progressing on the various sites, establish how funds will be used and make a full assessment of all publicly available information about the overseas property investments through Harlequin, and on all the parties associated with these investments.

In Harlequin’s 2011 annual report, the independent auditor BDO said: “There have been historic and ongoing problems with the accounting record keeping.”

The director’s report said the records were accepted by previous auditors Wilkins Kennedy, but Harlequin had since recruited more accounting personnel and allowed BDO to audit its related parties in St Vincent, Barbados, the Dominican Republic and St Lucia.

A statement from Harlequin said: “Changes have been made to the record-keeping in line with the advice from BDO and, as such, any historic issues with the accounts are being addressed fully and thoroughly.”

Harlequin has commenced a legal claim against Wilkins Kennedy alleging professional negligence.

A spokesman for Wilkins Kennedy said: “Because of the ongoing legal dispute we cannot comment other than to say Wilkins Kennedy is robustly contesting the claims against us.”

Companies House records show that Harlequin was issued with a striking off notice on the 3 April 2012, that was rescinded a day later.

The statement from Harlequin said this was due to the late filing of annual accounts.

Separately, the Harlequin statement said the firm was dealing with a few claims in the East Caribbean Supreme Court from investors who wanted refunds on investments.

It said: “Most requests for refunds are dealt with quickly and amicably without any recourse to litigation. However, certain purchasers have sought to claim more than they are contractually entitled to which can lead to a dispute. Harlequin has been successful in recent months in having certain parts of these claims dismissed.”

It said purchasers were entitled to refunds in accordance with their contract if properties were not built on time, but said only a minuscule proportion have sought refunds.

Harlequin property investments are promoted by alternative investment firms in the UK but are not under FSA supervision as they do not undertake regulated activity.

Harlequin had endorsed and helped construct the FSA alert, and had sent its own guidance to regulated advisers and unregulated agents.

Greg Walters, managing director of one agent, Roc Investments, believes there is still merit in Harlequin for the right client.

He said he was aware of delays to the Barbados project, The Merricks, because of planning permission, adding: “There are risks wherever you buy in any commercial property”.

The planning authorities in Barbados declined to comment.

According to Harlequin’s statement, a third hotel, H Barbados, is under construction and will open later this year.

Construction has also commenced at the Merricks resort in Barbados on the show village and infrastructure, Harlequin said.

Background:

Essex-based Harlequin is an agent for Harlequin Hotels & Resorts.

Investments are offered on its website in resorts located across the Caribbean, with some complete and others still under construction and sold off-plan.

Its locations house a football and tennis academy supported by Andy Townsend and Pat Cash respectively.