Tuesday, 14 April 2015

Secured energy bonds investors remain in the dark after creditors meeting

Creditors of Secured Energy Bonds remained none the wiser as to what had happened to their combined investment of £7.5 million in solar panels as a result of the recent creditors meeting.

The meeting was called by administrators Grant Thornton to principally elect a creditors committee of five people. Some 48 attended out of a total of 973 investors in Secured Energy Bonds.

Grant Thornton appeared unable to provide any information even as to where or how many solar panels had been fixed to school buildings before the bulk of the money seemed to be siphoned off to Secured Energy Bonds parent company CBD Energy in Australia. CBD Energy went into administration last November.

There was much anger directed at CBD Energy, Independent Portfolio Managers (IPM) and the Financial Conduct Authority.

Investors repeatedly claimed that this was a simple case of “corporate theft,” a number asking why the police had not been called in to investigate.

The total failure of the regulators in the form of the FCA and the security trustee, IPM, which was supposed to be safeguarding investors’ interests, formed another focus.

A number of investors had contacted the FCA, who took the attitude that it was nothing to do with them.

Investors were also frustrated that what little media coverage there has been of the SEB default seemed couched in the language that this was a risky investment and those making such a chance knew the dangers.

The reality, as more than one person testified, is that if this venture had been undertaken as sold, namely that solar panels would be installed on 22 schools with returns from the feed in tariffs etc then the 6.5% return over three years, was easily attainable.

The root cause of the problem is that the money has been siphoned off for other purposes, not being spent on the panels as originally stipulated.

There are some glimmers of hope for investors in the shape of recent court decisions, notably one in March in favour of the FCA on exotic investment schemes. Whether such decisions will help the SEB investors or simply illustrate that the FCA recognise that there is a problem in this area remains to be seen.  

One investor nicely summarised the concerns as being corporate theft, the role of the security trustee and mis-selling. 

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