Time lastly runs out at RC Watches after TONY HETHERINGTON exposé

Tony Hetherington is Financial Mail on Sunday’s ace investigator, combating readers corners, revealing the reality that lies behind closed doorways and successful victories for individuals who have been left out-of-pocket. Find out how you can contact him under.   

A mendacity London funding firm that was uncovered by The Mail on Sunday final August has been banned by the Financial Conduct Authority from finishing up any actions that want its permission, after investigators from the City watchdog discovered it was utilizing a string of false claims to draw buyers and win its FCA licence.

RC Watches, primarily based within the Hatton Garden jewelry district, provided rates of interest of as much as 13 per cent, boasting that this was a ‘risk-free funding’, with buyers’ money ‘totally asset backed and capital protected’. 

Funds borrowed from buyers would assist construct up the enterprise forward of the launch this 12 months of a scheme that might commerce in luxurious watches similar to these from Rolex and Cartier – in impact, a unit belief holding costly watches as an alternative of shares. 

The firm was solely authorised by the FCA to behave as a credit score dealer, however having gained approval for this and acquired its title on to the watchdog’s public register, it was doubtless that it will additionally get the nod for its deliberate funding fund.

Order: The agency is banned from providing investments needing FCA permission

However, my very own enquiries final summer time confirmed that though firm data named the only director of RC Watches as Gurpreet Sandhu, he was actually a 62-year-old dentist from Sanderstead in Surrey, whereas the true boss in Hatton Garden was his son Timothy. And Timothy Sandhu, 35, had good motive for wanting to remain under the City regulator’s radar, after working an unlawful share-selling firm seven years in the past.

In 2017, The Mail on Sunday sounded the alarm over Incrementum Funding, which was advertising and marketing shares in a luxurious watch firm known as Paragon Time Trading. Paragon collapsed quickly afterwards, costing victims greater than £400,000.

Because Incrementum Funding was working with none authorisation from the FCA, victims had no entry to the Ombudsman or the Financial Services Compensation Scheme. Its proprietor and sole director was Timothy Sandhu, now the true boss of RC Watches.

The FCA has issued RC Watches with a Supervisory Notice, saying: ‘The Authority has recognized critical considerations referring to the agency in that its conduct seems to display that it poses a big threat of hurt to customers.’

Before it licensed RC Watches, the regulator had been assured that the corporate was not on the lookout for outdoors buyers. In the wake of our report final August which revealed the precise reverse, the FCA instantly challenged the corporate, which replied that there had been a mix-up by its web site supplier, who had been engaged on an analogous web site for a distinct enterprise.

However, muddying the waters much more, a number of days later the FCA was informed that RC Watches and the web site providing investments ‘usually are not linked in any respect’. 

It was implied that the web site may be a clone, impersonating RC Watches, and the e-mail added that the corporate would again a public alert. When the FCA identified that this contradicted the sooner rationalization of a mix-up, RC Watches claimed the reason involving a suspected clone was an ‘error’.

By then the watchdog’s personal investigators have been more and more suspicious. They organized to satisfy the corporate’s supposed boss Gurpreet Sandhu on October 2, however a number of days earlier than the assembly his attorneys requested for questions in writing as an alternative. A gathering was then organized for October 17 however was additionally cancelled and rearranged for October 27.

Two days earlier than the assembly, Sandhu’s attorneys admitted that he was not likely in cost, saying that ‘the person working the day-to-day enterprise’ was actually Timothy Sandhu. 

This uncovered the lie informed to the FCA when RC Watches utilized for FCA approval and claimed that Gurpreet Sandhu ‘carries out the working of the day-to-day enterprise as sole director’. The attorneys then informed the FCA that they’d be attending the October 27 assembly together with Timothy Sandhu, however not his father Gurpreet. The assembly was cancelled.

FCA investigators then examined the agency’s financial institution assertion and different data, and located that whereas denying it was providing investments, it had already raked in £214,500 from buyers. RC Watches had informed buyers it will ‘use FCA-regulated escrow suppliers with safety trustees on your added safety’ – but the watchdog discovered buyers’ money had gone straight into the agency’s checking account, with no outdoors monitor concerned.

Sandhu additionally inflated his firm’s figures in funding paperwork, claiming that 2021 earnings after tax have been over £450,000, whereas the FCA discovered {that a} lack of round £155,000 was extra doubtless. Investors have been informed that in the identical 12 months RC Watches spent £2.7million on inventory, but the corporate’s financial institution accounts confirmed purchases costing lower than £43,000.

So what occurred to buyers’ cash? According to FCA investigators, there was ‘a sample of investor monies being acquired by the agency, adopted by substantial funds being made on the identical day or shortly after’ to Gurpreet and Timothy Sandhu and to an unnamed third social gathering who’s suspected of being a salesman who pocketed a fee of round one third of the cash he raised.

RC Watches is now banned from providing any investments or providers that require FCA permission. Gurpreet Sandhu and Timothy Sandhu have been invited to remark however didn’t reply.

If you imagine you’re the sufferer of monetary wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or electronic mail [email protected]. Because of the excessive quantity of enquiries, private replies can’t be given. Please ship solely copies of authentic paperwork, which we remorse can’t be returned.