This is certainly an intriguing and interesting question which was posed on Google Plus by Régis Chaigne, a Bordeaux vigneron based in St Laurent du Bois.
Régis’ question was prompted by my post last Friday on investdrinks that reported the ban on Ian Vanderhook from being a UK company director for nine years. Vanderhook was the managing director of wine investment company – Bordeaux UK which ‘collapsed’ in November 2011 with debts of more than £10 million. At the time there was only £1.7 million worth of wine available.
According to the UK Insolvency Service, Bordeaux UK Ltd took over £23 million (27.16 m€) from investors between October 2008 and October 2011. However, only £4.6 million (5.44 €m) was used to buy wine. Of the remaining £19 million (22.45 €m) at least £2 million (2.36 €million) was trousered by Vanderhook, while £13 million is unaccounted for because of the lack of financial records. One has to wonder how far this was a deliberate policy to disguise what happened to the money and how far this was down to sheer incompetence.
I was at the creditors’ meeting for the appointment of the liquidator in November 2011. Vanderhook, a former lift engineer, was present. It was clear that despite apparently running a wine investment company for over nine years his knowledge of the fine wine market was limited. It would seem quite probable that he was a front man for someone else who may well have benefitted from some of the unaccounted £13 million.
Bordeaux UK started to operate back in 2002 soon after James Hewitt Associates Ltd, another wine investment company, was closed down in the public interest by the High Court in London. In turn James Hewitt Associates started to operate soon after Liquid Acquisitions Ltd, yet another wine investment company, was also closed in the public interest. Both James Hewitt Associates and Liquid Acquisitions were controlled by Andrew Dunne, formerly of the Bromley area in South London and now residing in Northern Cyprus.
At the creditors’ meeting Vanderhook was asked about whether Dunne was involved in Bordeaux UK. Vanderhook said that Dunne gave some occasional staff training. Given the past history it seems a very reasonable bet that Dunne’s involvement was actually far more significant even if it was a shadowy presence.
For those of you who have read this far, when you must be wondering am I going to get round to answering Regis’ question.
It is clear that both 1855 and Bordeaux UK have ripped off their clients to a very considerable degree. Bordeaux UK is outlined above, while 1855 and their associated companies have failed to fulfil a significant number of their clients’ orders, especially in relation to Bordeaux en primeur.
Although Bordeaux UK Ltd is now a dead company, the position in relation to 1855 and its associated companies is less clear. Héraclés, the new name for 1855, and ChateauOnline, also renamed – Ares, are both in administration (redressment judicaire). Shares in Heracles continue to trade on the Paris Bourse with shares now changing hands bat between 0.03€ and 0.05€ – six months ago they were at 0.12€. 1855 will remain initially in administration until 9th April 2014, while for ChateauOnline the period lasts until 22nd April 2014. As the administrator is busy collecting details of these companies’ debts I have to wonder whether once these have all been logged whether the 1855 group will have a viable future and that is before you consider the group’s toxic reputation.
The principal actors – Emeric Sauty de Chalon, Fabien Hyon and Ian Vanderhook – from both companies ought to be facing an appearance in a criminal court based on their consistent failure to supply their customers with wines ordered with payment made. See recent article LARVF suggesting that prison may await Chalon and Hyon.
There are some clear differences between the two companies. 1855 sold wine not investments unlike Bordeaux UK which sought to separate their clients from as much of their life savings as they could through high pressure sales tactics. As far as I know 1855 did not use cold calls replying instead on ‘attractive’ offers through their websites.
In contrast to Vanderhook, Emeric Sauty de Chalon and Fabien Hyon know something of fine wine.
The two companies offered Bordeaux en primeur, which some of their customers did not receive. Bordeaux UK went one better than 1855 by selling 2009 Lafite in February 2010 a good three to four months before the château announced the price.
I find it staggering that the 1855 group lasted as long as it did give the avalanche of negative comment on the net and in the traditional press. Do potential customers not bother to check out a company before placing an order or do they enjoy the thrill of Russian roulette even though the odds are stacked against them receiving their wine? It is equally staggering that Bordeaux UK Ltd managed to solicit over £23 million for wine investments from customers who probably knew little about the company with whom they were dealing.
It remains to be seen whether the 1855 scam be repeated but it is sure that there are already similar cases to Bordeaux UK Ltd and doubtless will be more in the future. Last week wine investment company The London Vines Ltd went into liquidation. From the many messages I have received it seems clear that a substantial number of investors have not received their wines.