Property  

Harlequin: Administration will not threaten investments

Harlequin Management Services (South East) Ltd, which trades as Harlequin Property, is set to enter administration after it filed a notice of intention to appoint an administrator at the High Court of Justice on 22 April 2013.

Harlequin Property is the primary UK sales agent for Harlequin’s Caribbean-based resort development companies and is not regulated by the Financial Services Authority.

However, a spokesperson for the company said the administration “will not threaten” investments and added that the directors are “confident” the firm can be rescued as it undertakes a restructuring.

The court document, seen by FTAdviser, says that an interim moratorium is now in place with the effect that legal action cannot be taken against the company at the present time.

In recent months Harlequin has been hit by a spate of allegations including liquidation rumours and has been the subject of an FSA warning alert.

In January 2013, Buccament Bay Resort Ltd, Harlequin’s main resort, denied that it is in liquidation and blamed its former UK auditor Wilkins Kennedy for not filing its financial statements or annual returns for the period from 2005-2012.

Wilkins Kennedy denied that it was appointed for Harlequin Property SVG Limited or any other overseas company within the Harlequin organisation, but told FTAdviser that it previously acted as auditors to Harlequin Management Services (South East) Limited and resigned in 2010.

Also in January, the FSA issued an alert warning advisers over recommendations to clients to invest large sums into self-invested personal pensions weighted heavily towards overseas property bought by Harlequin Property.

Following the FSA alert, the Serious Fraud Office announced it is investigating complaints over the Harlequin property group together with Essex Police.

A spokesperson for Harlequin Property said: “The last few months have given Harlequin the chance to restructure its business to attract new outside investment and develop properties in accordance with the sales made via Harlequin Property.

“The first stage of this restructure is for the directors to place Harlequin Property into administration via a notice of intention to appoint administrators.

“Harlequin Property has supported the Caribbean resort development companies over the years but is not, in its current form, an essential component to the future business of Harlequin in its role of delivering investments as a developer and hotel operator.”

The spokesperson told FTAdviser that the directors believe the firm can be rescued.

The spokesperson said: “The administration procedure will give Harlequin Property some breathing space and the ability to deal with its challenges.

“The underlying business model of the Harlequin group is strong and the directors are confident that, with the external finance and property completions anticipated, our investors will see significant development at our resorts in the near future.

“Investors can be assured that the company sees no reason why these circumstances would threaten their investment with Harlequin. In fact, the measures set out above are a means of further securing their investments from external and contrary interests.”