UK gov’t petitions for self-storage business Store First to be wound up
The UK authorities have filed a petition seeking the winding up of a Lancashire-based self-storage business known as Store First, which its parent company, Group First, promoted on its website and in YouTube videos as a “safe” investment option.
Store First had been among the “storage pod investment schemes” held by members of two pension schemes who, as reported, the Serious Fraud Office reached out to last month, as it launched an investigation into such investments.
The pension schemes in question are the Capita Oak Pension and Henley Retirement Benefit schemes, the SFO statement, on the SFO’s website on 22 May, noted.
The order came in the form of four petitions, one for each of the Store First operations, filed by the Government last month and posted on the Insolvency Gazette on Wednesday.
A hearing in connection with the matter has been set for 1 August in the Manchester District Registry in Manchester.
A spokesperson for the SFO said it had no comment to make at this time, as the matter remains under investigation.
A Group First spokesperson, Ruth Almond, said: “We can confirm that winding up proceedings have been served on us. We have instructed our solicitors and intend to defend these proceedings vigorously.
“Given that High Court proceedings are now in progress, it would be inappropriate for us to comment further at this stage, pending our formal response to the proceedings. We are advised that the proceedings could take many months.”
She added that the company continued to “believe firmly in our business model, and that is why over the years we have worked in an open and transparent manner with the regulators explaining how our business operates.
“Indeed, we cooperated fully with the Secretary of State’s enquiry, and had understood it to have concluded and were therefore surprised to have received proceedings at this point.
“We will provide a further update as to our position as soon as we are able.”
SFO: ‘one thousand-plus investors, £120m invested’
In its statement announcing the launch of its investigation into storage pod investment schemes last month, the SFO said more than a thousand individuals were thought to have invested a total of around £120m in such entities through the Capita Oak Pension and Henley Retirement Benefit schemes, via Self-Invested Personal Pensions (SIPPs) “as well as other storage pod investment schemes”.
The SFO went on to “encourage members of the public who have invested in these schemes over the period 2011 to 2017 to complete a questionnaire” it has posted on its website.
Sources who know some of those invested in self-storage investment schemes told International Investment today that many investors are concerned that they could end up losing some or all of their money.
The numbers of people investing in such vehicles is said to have increased after the UK government introduced “pension freedoms” in April, 2015, that made it easier for people to access their retirement cash.
‘8% return for two years’
A five-minute Store First YouTube marketing video, posted in September 2014, takes would-be investors through the business, starting with an explanation that Store First “builds self-storage centres and sells individual or multiple units to you, the investor”.
“It’s a subsidiary of the Group First family of companies, which also includes Park First, Business First, and Residential First,” viewers of the video are told.
“Store First Management Ltd is a separate company, set up to run these storage centres.
“Unlike other storage companies, Store First has much lower overheads, because units are owned by investors.
“There’s no VAT, stamp duty or estate agency fees to pay, and the units fall below the minimum size for business rates.
“So all of these savings means that Store First can promise you an 8% return for two years, and mean it.”
Pensions ‘100% invested in Store First’
Angie Brooks, pictured left, the Spain-based British founder of a UK pension fraud victims’ campaign group, Pension Life, says she personally knows “at least 70 investors who transferred their pensions to either the Capita Oak and Henley pension schemes or SIPPs” and whose pensions in these schemes “were 100% invested in Store First”.
She said they had been told they would receive returns of “8% per year for the first two years, with even higher returns in subsequent years”, and also promised that Store First “would buy the pods back for the same price as was originally paid after five years”.
“They were also promised loans of between 5% and 20% and were told they would never have to pay them back and that there would be no tax to pay.
“After two years of silence from the operators of Capita Oak and Henley, and discovering that nobody was answering emails or phone calls, the victims started to get seriously worried”.
Towards the end of 2014, Brooks said, questions began to be asked, including by BBC journalists, and in May 2015, the Insolvency Service completed an investigation in the matter. “But there has been considerable frustration that no action was taken by the Serious Fraud Office until May 2017”.
Brooks said the investors are reacting “with mixed emotions” to the news of the winding-up petitions against the four Store First companies.
“Nobody really knows whether there will ever be any value in the pods, or whether it would be better to demolish them and sell the buildings as normal commercial property.
“The victims unanimously wish the authorities had taken action considerably earlier.”
Brooks, who as reported has been part of a group who have been working to get UK lawmakers and regulators to beef up regulations governing the way pensions and other investments are sold in Britain, added: “With the UK election days away now, I would urge everyone to speak to the parliamentary candidates in their constituencies and explain to them the importance of supporting [UK MP] Greg Mulholland’s motion to address pension and investment scams.”