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One thing is clear from the Worthington fraud and that is that Whyte is far from stupid, the amount of strategic thinking and planning along with the medium to long term viewpoint is quite admirable.

 

Makes you wonder just why de didn't apply such skills to making an honest living.

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Part 18

 

Aiden Earley is disqualified as acting as a director of any company. Acting as a shadow director is a criminal offence but as the email I run below shows it is Earley who pulls the strings at the fraud Worthington (WRN), Doug Ware just does as he is told. This email will be part of the dossier I hand to the SFO and FCA on my return to the UK. Incidentally you will note that not only is Earley calling the shots talking of activities “we plan” but:

 

1. He is in bed with the chap behind Wills stockbrokers ( do a google search for Wills & Co FSA)

2. He plans to recruit sales staff to flog Worthington stock and bonds – what?

3. You will note the reference to targeting those on the Pritchard’s client list. That was a firm of stockbrokers owned by Craig Whyte which the FCA closed down for using client money to pay its own bills.

4. You will note that while Doug Ware claimed he severed all ties with Whyte in July 2012 here we are in February 2013 with Earley saying Whyte had firms that would be sold into Worthington

5. Who are GIS UK Ltd? More on that in part 20 of this series – I have another email or two J

 

This is the latest dynamite email

 

From: Aidan Earley

Sent: 09 February 2013 11:27

To: Doug Ware

Subject: RE: GIS UK Ltd- Account Set Up Confirmation

 

WRN Briefing Note

 

Office

 

The plan is to establish a Worthington office headed by Richard. The cost of Richard will be split between us and Rob Holgate, excluding his non-executive director fees which will be borne by Worthington.

 

The purpose of the office is to have a place for Worthington and somewhere in the city in order to operate so that the various activities that we plan are brought to fruition. It is easier to exchange ideas and set plans if we are able to discuss things on a frequent basis.

 

There are 12 spaces available in the office in London Wall as well as an impressive board room and facilites. Useful when showing potential clients around.

 

Debt collection

 

In the first instance the office can be used to set up a team of debt collectors. There is a debt collection business that Worthington can acquire and which needs to hire additional debt collectors. The debtor book consists of approximately £50 million of overdue debtors, many of whom are substantial organisations. The plan is for Worthington to acquire a number of these debtors in order to improve Worthington's cash flow and to bolster its balance sheet – subject always, of course, to the insolvency clause vis a vis the pension fund. At the current time debts are being collected at approximately £10,000 per week from the Glasgow office. It is expected that the London office would be able to achieve at least this.

 

Payroll business

 

Another possible income stream is the establishment of a payroll marketing business where companies achieve a 10% saving by transferring their employees to an outsourcing company. There is a large listed company that performs this service and has been very successful. I have come across a business that now has 30 clients which is proving to be successful. The owner of this business had previously sold a similar one to the listed company and is now building another one which is on course for a £2 million profit this year. It is possible that an interest in it could be acquired by Worthington. At the very least we could set up a team of telesales people to offer the service. It is not a business where companies can avoid paying their various employee taxes but it is a way of saving money and it has proved to be popular. In fact it is a consideration when making acquisitions of businesses whose operating performance would be markedly improved by these savings. A team of three or four people could, in my view, generate commission of £10,000 a week in due course.

 

Litigation funding

 

It is clear that there is a large demand for litigation funding and also a significant market in the provision of litigation funding. This is a business sector that Worthington could enter – particularly in the light of the proposed Sevco acquisition.

 

We need to give thought as to how best to build a business in this area.

 

The current ingredients that we have include

 

Sevco

Laurels solicitors

The Judge litigation funding brokers

Richard Beresford

Litigate

 

 

Cash raising

 

The plan is to raise money by selling shares and investments to high net worth and other investors.

 

It is not possible, at this stage, to market to ordinary investors as we do not have a regulated business.

 

It is to this end that a tie-up with Rob Holgate's GE club is very useful. The club's website address is (http://www.thegeclub.com/) and it has been successful in attracting around 250 high net worth investors so far. Rob has set up an operation in Minorca to market this club more widely and now has 10 dealers. The club markets the EIS and SEIS investments to high net worths. These investments have tax relief ranging from 50% to 103% which makes investing in these products relatively low risk. It is a similar way to the method that Rob used to build Wills and Co 15 years ago.

 

Generally speaking a company should not be listed on the main market but could be listed on Aim. Rob however is concentrating on new private companies that will raise money and go to market after three years. His is raising between £150,000 and £500,000 for each company at this stage. He is willing to prioritise our investment proposals providing they meet the tax clearance criteria.

 

However we really need to be able to market Worthington shares and bonds. To this end we are able to recruit a dealing team providing we can get regulatory cover. This dealing team would also be based at the Worthington offices. It is in order to get retail broker permission that we were interested in a deal with Alexander David Securities. The dealing team that we have in mind would be headed up by Kieron who successfully raised several million pounds for the turnaround companies. We need to establish whether we simply need investment advertisement clearance to do the same thing, with the dealing team effectively working for the turnaround companies themselves, or whether we need a retail license.

 

We need to obtain the Prichard and Clarkson client lists in order to market to investors both to increase our proposed stake in the GE club and to be paid a commission for each trade that such investors execute.

 

With a simple corporate finance permission from the FSA we can start a highly specialist tip sheet – one tipping one or two companies every quarter. These tips would be the marketing pillar of our approach to new investors. Successful tips being a powerful attraction. We have arranged a short selling facility through Global stockbrokers so we can now also make short sell recommendations.

 

We also have the opportunity to list companies on the GXG stock market and market these to investors worldwide – starting with Stephen Wheatley's operations in Germany and Hong Kong.

 

Possibly the most significant way of reaching investors is through Clarkson Hill and Structured Products. These businesses are, apparently, now profitable to the tune of approximately £500,000 per year and can be acquired from Merchant House for only £100,000 in cash due to a clause which granted 61% of the shares to Merchant Turnaround in the event that Merchant House Financial Services (the current owner of Clarkson and structured products) failed to repay a loan. In the event that the £100,000 can be paid this would be repaid out of the monthly £0.5m gross commissions that Clarkson receives. Between Clarkson and structured products we can sell large quantities of investments to retail and professional clients through the IFA network. We need to make sure that our own products are being sold.

 

Worthington and the pension fund risk

 

The plan is that Worthington acquire businesses including Sevco, the debtor book and the Quidco type business that Craig has started in return for unsecured convertible loan notes. Assuming we make acquisitions of companies with an aggregate value of more than £25 million in unsecured loan notes we could potentially force the pension fund to accept Worthington shares or loan notes in settlement of its debt by way of a CVA. In addition to the insolvency clause built-in to each acquisition this would enable Worthington to begin to develop its business without having the rug pulled from under it.

 

The Sevco deal

 

The plan is to complete the first stage of this deal by 14 February. This would include the issuing of secured loan notes that are convertible into Worthington shares in return for an initial 10% of Sevco with an option to acquire 100%. We need to be clear on the next steps to achieving this target.

 

 

http://www.shareprophets.com/views/10848/the-worthington-fraud-part-18-who-is-really-in-charge-explosive-email

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Bit worried about the references to dodgy mining companies @15.00. I'm sure there's a proxy shareholder which holds shares for some bizarre mining bunch, although hopefully it won't matter too much soon. Also horrible to hear about the pension fund being siphoned through Rangers on it's way to disappearing...I can't see the club being liable but they'll never get the money from the likes of Early, Ware or Whyte either.

 

Horrible, horrible, horrible.

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That has been some releases by Tom. I have read them all and listened to the bearcast at the end and just can't believe what this lot get up to.

That bearcast kinda covers the whole parts if you can't be bothered reading through them all but the emails are dynamite and it shows the extent of the Jerome fraud

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