The concept of Fool's gold has extended into the modern age of investment scammers, as people lose fortunes on gold mines that don't exist.
So it is somewhat apt that IPR Capital Ltd, a company which sold partnerships in a gold mining company in Ecuador as investments, was learning its final fate in the High Court on April Fool's Day.
It was placed in provisional liquidation following an investigation by the Company Investigations section of the Insolvency Service.
IPR Capital Ltd sold five-figure sum partnerships into a limited partnership that it wholly controlled, known as IPR Capital Mining 06 LP, to members of the public via a network of sales agents.
A boom industry
One of these agents was Kendrick Zale. Giving a maildrop address in the City of London, Kendrick Zale coldcalled potential investors saying gold was about to soar but buying “physical gold” such as coins or bullion was outdated, thanks to a new model from IPR Capital.
Its website told potential investors: “Gold remains a boom industry in Ecuador, as highlighted in a recent BBC News re-port(sic) which also ratified the purchase of the economic benefit of a mine to be a solid investment.” It also cited The Economist and Bloomberg, neither of which knew how it had been misused.
There was a huge gap between this narrative and reality, which resulted in huge amounts of investor cash disappearing. Kendrick Zale claimed that “Due to the nature of our business and our varied range of financial products, our employees are given market training from industry specialists. We are very confident that our team possesses the skill set and efficiency required servicing your account to complete satisfaction.”
But not to the satisfaction of the authorities.
Last July, Kendrick Zale, which also sold carbon credits, was wound up in the public interest by the High Court in London for making false claims about investment returns. The company sold carbon credits for £3 and claimed that their value would increase to £7.80 or £8 within 18 months.
In the six months of the scam Kendrick Zale ripped off at least £1.1 million. Not bad for a company only registered in March 2013. Its sole director was Manjeet Matharu, now aged 30.
Kendrick Zale's website was shut by Action Fraud but many traces remain.
Diversifying? Doubt it
Back to IPR.
In 2010 IPR Capital, working out of a Mayfair address, claimed to be “the most experienced practitioners of the patent auction process” with “unequalled expertise in analysing the market potential for inventions and quickly executing a competitive patent sale”. It said clients included “universities, corporations, private equity investors and individual inventors".
It claimed to have a background in investment banking and technology R&D, so “we are uniquely able to advise, assist and execute on the sale of your patent portfolio.”
It was all complete fantasy, but it sounded good, which only helped to dupe gullible investors.
That firm morphed into iProfit Capital, which reverted to IPR Capital, now run by Steven Mayne, aged 34, whose credentials include appearing in many online investment videos talking about markets and technical chart analysis of major indexes.
Steve wrote on social media: “We are also diversifying into the exciting world of litigation funding which will give our partners and agents more unique products.”
Probably not, Steve. The court is unlikely to do anything other than to back up the provisional liquidation with action to wind up this company forever.
Whether any of those who trusted the Ecuadorian gold mine story will ever get anything back is doubtful though.