Saffron VIP, marketing company for the apartments at the International Autodrome, Portimão, went bust and any knowledge of its deal with apartment investors is denied by Parkalgar’s Paulo Pinheiro.
Investors paid deposits for the apartments under an agreement with Saffron VIP that stipulated that the company would buy back the Vista de Falcao and Vista das Ondas apartments on their completion, with any profit being returned to investors, and then sold on by Saffron VIP into fractional ownership. Then it closed.
Now that Saffron has gone, Parkalgar’s controversial boss Paulo Pinheiro denies all knowledge of this deal and refuses to honour its terms, even though it was Pinheiro that contracted Saffron VIP to sell the apartments on his behalf and it is pretty inconceivable that he did not know the details of the deals being offered in Parkalgar’s name. Moreover, Pinheiro is demanding that investors now pay the very full 2009 price for these apartments, or lose their deposit money.
Here, a specialist accountant following the Parkalgar story picks over the bones of yet another sorry chapter in the company's s shadowy history:
Saffron VIP Limited is a ‘marketing company’ working for Parkalgar, the owner of the International Autodrome near Portimão. Like Parkalgar, Saffron VIP went bust leaving investors who paid deposits for apartments very high and very dry.
Having looked at Saffron VIP Ltd's last available accounts 2011, I noticed that they were virtually meaningless. Not only were they poorly prepared, there was almost no point to them. As with many accounts for small companies, there is often more needless wording added then there are figures.
This is to assure us all that the accounts comply with the latest companies act (the current one being the Companies Act 2006) and everything is clean and kosher. We can all rest easy that our money (should we have any invested in a company) is being looked after.
In Saffron VIP Ltd's accounts there is no accountant's report or any indication that a firm of accountants produced the accounts.
Saffron VIP Ltd is run by the Benjamin R. Jones, who also ran another company with a similar name: Saffron Villas Limited which was dissolved on 29 December 2009. The two companies had (Saffron VIP Ltd is being struck off so we should really refer to it in the past tense) the same registered office: Prospect House, Woolton Hill, Newbury, Berkshire, RG20 9TT in the UK.
Another person associated with both companies is Geraldine Jones, who we should assume is Benjamin's wife. Or maybe it's his sister.
Having already dissolved one limited company with a similar name, why did Benny and Geraldine Jones form another so quickly? And why has it gone bust?
So let's look at the facts, or the figures to be more accurate. The balance sheet on Saffron VIP Limited, the total shareholders' funds, is £207.
Saffron VIP Ltd's balance sheet, as at 30 April 2011, informs us that the company had debtors of £108,357 and creditors of £108,282.
The only other interesting figure is that the company had cash, either in the bank or hard currency, of £135.
Unfortunately this does not seem to be the case for some of the people who invested in the activities promoted by Saffron VIP Ltd. The company was set up to promote the sale of several apartment blocks called Vista do Falcao and Vista das Ondas next to the International Autodrome owned by Parkalgar.
In the previous year's accounts (2010) we were informed that the company had £3,397 in liquid capital.
If you look at the notes to the accounts we are informed that the directors repaid a directors' loan account of £5,245. This is the amount directors are allowed to take out of the company during the year. Directors can also put money into the company, or loan it other goods and services and these amounts can be netted off against amounts withdrawn. Thus directors can often be owed money by the company - but not in this case.
To stop directors taking too much money out of a company, to supposedly protect creditors, investors and other outside agents who have an interest in it, there is a limit on the amount the directors are allowed to take out.
It used to be £5,000, now increased to £10,000, and technically this amount should not be exceeded during the year. That's the theory. In practice, many directors (especially in small companies – like Saffron VIP Ltd) keep very poor records.
These are often referred to by accountants as incomplete records. Sometimes these records only amount to the opening balances, the previous year's accounts, some bank statements and a few other sundry documents.
With timing differences as companies having different year ends to the financial year – 5 April in the UK, and other factors such as directors being officers and shareholders of other companies, it doesn't take a Stephen Hawking to figure out that there are loads of possible combinations to manipulate accounts for tax and other purposes such as disappearing with investors' money.
One could be forgiven for thinking that all the legislation that governs companies' actions (Companies Act 2006, as well Directors Disqualification and Insolvency acts) should reassure people who do business with these companies that their money is safe.
Thus while the weight of company legislation seems impressive it does little to prevent the pernicious actions of people like Benjamin Jones, Paulo Pinheiro (director of Parkalgar) and the whole Parkalgar outfit.
At the time of writing Saffron VIP Ltd's last accounts were due on the 31 January 2013. How long does it take to prepare a set of accounts with just a few simple figures?
The apartment investors are now in a position of either losing their deposits or having to pay the full price (at the 2009 values) for their apartments.
Here is Saffron VIP's original ad - what possibly could go wrong...?
an annualized return of almost 42% guaranteeing to double your investment on exit
This is a safe & secure opportunity for investors to make a 100% profit with a guaranteed exit strategy that requires no mortgage, no hassle, offering a hands-free investment backed by some of the best known brands in the industry.
"Vista de Falcao actually provides a mechanism whereby the developer will earn a greater profit by executing the buy back"