TONY HETHERINGTON: Obatan isn’t offering a stock scam, just a bad deal

Tony Hetherington is the Financial Mail on Sunday’s top investigator, battling readers’ corners, exposing the truth that lies behind closed doors and winning victories for those left out of pocket. Find out how to contact him below.

Ms MJ writes: I was betrayed by Obatan.

I filled out a form and mailed my stock certificate from Sun Life Financial when Obatan said they were willing to buy my stock, but I haven’t received anything since.

Offering: Obatan is based in Glendale, California

Tony Hetherington replies: Let me say one thing straight away. You contacted me at a time when the Financial Conduct Authority had publicly warned that Obatan might be offering financial services without their authorization. It urged everyone to “beware of dealing with this unauthorized company” and advised “steps you should take to protect yourself from fraud”.

About four weeks later, FCA took back every word of it. She announced: ‘The FCA, based on the information currently available to it, does not believe that Obatan LLC is carrying on activities in the UK for which it is required to be licensed.’

So what are these activities exactly? Well, Obatan — which is based in Glendale, California — has reached out to shareholders at a number of companies, offering so-called “mini-tenders.” In short, it offers to buy their shares. This is perfectly legal, but foul value for anyone who accepts it. And because Obatan says it will only acquire a modest stake in the target company, it doesn’t fall under the usual rules for takeover bids.

Sun Life Financial said it did not recommend or endorse the offer, which included £26 per share. That was around 39 percent below the price you could have gotten in the stock market.

I assume you missed this warning because you accepted the offer and mailed your share certificate to Share Registrars, a Surrey company trading for Obatan. I asked the share registrars for comment and was immediately contacted by Obatan’s London-based solicitor, Edwin Coe.

Russel Shear, the firm’s clerk, fired an unnecessary shot across my bow and told me, “Please note that our client’s rights are reserved in relation to any defamatory information you wish to make public.” He labeled the FCA’s warning as “completely false”, adding that the mini takeover bid was in fact approved by a person authorized by the FCA.

Shear explained that Obatan simply “provides a solution to shareholder acceptance to sell their shares that may otherwise not be available to UK resident shareholders”.

I asked what the problem was that needed solving and Shear told me it was the fact that Sun Life Financial shares are not listed in the UK. That’s true, but they’re properly listed on the Toronto Stock Exchange, so they can easily be sold through a UK broker.

Neither Shear nor the share registrars would tell me who the FCA authorized person who approved the offer is, and Shear told me to stop asking questions as Obatan didn’t want what he described as an “ongoing debate.”

While all this was happening you received a check for £3,354 in payment for your shares. If you had sold them through an agent instead of to Obatan you would have gotten around £2,000 more.

Obatan has made similar mini-tender offers for shares of other companies, including Great-West Lifeco — which owns Canada Life — and Manulife. The offers are 30 to 40 percent below the market price.

It’s like going up to my neighbor and offering to buy his £20,000 car for £12,000. It’s perfectly legal, and if my neighbor somehow assumes I’m helpful and accepts the offer, I’ll get his car at a bargain price. But to him, like Obatan’s offer to you and other investors, it’s really, really lousy value.

Where have my BA flight miles gone?

JH writes: I have a dispute with BA whose staff deleted my Executive Club membership from their system without warning. I had over 550,000 Avios miles.

BA has given a number of reasons ranging from privacy to inactivity. The inactivity was caused by a serious illness in the family and travel restrictions due to Covid.

Now it says it can’t find my data on its system, which of course is because it deleted my account.

Sting in the tail: BA staff deleted JH’s Executive Club membership from his system without warning

Tony Hetherington replies: BA informed me that your account and all your airline miles have been deleted because the rules of the program state that you must use your account at least once every 36 months.

But you have explained that your daughter had a serious long-term medical problem that culminated in surgery a few months ago. This, along with the pandemic, has kept you grounded.

It was only when your daughter was sufficiently recovered that you attempted to book a vacation with her in the US, only to find that your Avios miles had disappeared. I am very pleased to say that BA has reconsidered.

The airline informed me: “Due to the significant amount that Mr H. had in his previous account, which he wishes to use for his daughter, our team has reactivated the Avios on this occasion.” Happy Holidays!

We are watching you

Two south London scammers who scammed 2,000 investors out of £37million have each been sentenced to 11 years in prison.

Andrew Nathaniel Skeene, 44, and Junie Conrad Omari Bowers, 45, were convicted by Southwark Crown Court last Wednesday after being convicted of conspiracy to commit fraud a few weeks ago.

The duo were behind Global Forestry Investments, which they founded in 2009, claiming that planting and growing teak trees in Brazil is an ethical system.

Locked up: Junie Bowers, left, and Andrew Skeene swindled investors

Advertisements offered a 12 percent annual return, but I warned at the time that Skeene was already behind a shady scheme promising a 30 percent return on property developments in Dubai.

Global Forestry Investments collapsed in 2014 and Skeene and Bowers were declared bankrupt. The Serious Fraud Office launched an investigation in 2015 and the two men were charged in 2019. SFO investigators found that almost no work was being done on the Brazilian plantations. The couple had withdrawn around £750,000 in cash and were known to have spent a further £2million of the investors’ money on luxury living and entertainment.

Skeene paid for his lavish marriage with investors’ savings and pension pots, and Bowers bought a Bentley Continental GT. Lisa Osofsky, head of the SFO, said: “The ruling warns scammers that if they gamble quickly and loosely with someone else’s hard-earned savings or pensions, we will prosecute them and hold them accountable for their crimes. The SFO is bringing seven more fraud cases to court by the end of the year, involving 18 accused and more than £500m.

If you believe you have been the victim of financial wrongdoing, write to Tony Hetherington, Financial Mail, 2 Derry Street, London W8 5TS or email tony.hetherington@mailonsunday.co.uk. A personal answer is not possible due to the high volume of inquiries. Please only send copies of original documents, which unfortunately we cannot return.

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TONY HETHERINGTON: Obatan isn’t offering a stock scam, just a bad deal

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