Harlequin, the company that owns Buccament Bay Resort, has applied in the United Kingdom for its sales arm to go into administration, the British website, Echo, has reported.
Administration functions as a rescue mechanism for insolvent entities and allows them to carry on running their business. It is an alternative to liquidation — when the company is brought to an end and its assets and property redistributed.
But the company, whose chairman, Dave Ames, is a British and Vincentian citizen, maintains that its businesses registered in the Caribbean, which own and plan to build resorts in the region, will continue.
It blamed negative publicity for the decision to put the sales arm into administration but said the move could still secure clients’ investments.
On Monday, the company informed the High Court in London of its intention to appoint administrators for Harlequin Management Services (South East) Ltd.
“The company is or is likely to become unable to pay its debts,” director Carole Ames said in a statement.
“Due to unfounded negative publicity in the public domain that has been instigated since 2011, the day-to-day UK sales business of Harlequin Property has become increasingly challenging, to the point that it is now almost impossible,” Ms Ames further said in the statement.
“The underlying business model of the Harlequin group is strong and the directors are confident that, with the external finance and property completions anticipated, our investors will see significant development at our resorts in the near future.
“Investors can be assured that the company sees no reason why these circumstances would threaten their investment with Harlequin. In fact, the measures set out above are a means of further securing their investments from external and contrary interests,” she said.
The move has prompted fears over the future of at least 6,000 investors’ deposits, many paid through personal pensions, and around 40 jobs at one of Harlequin’s offices in the United Kingdom, Echo reported.
In St. Vincent and the Grenadines, a number of persons have complained about not being paid by Buccament Bay Resort for goods and services provided.
Harlequin Property, has taken more than 300 million pounds in deposits from at least 6,000 investors for off plan luxury holiday accommodation across the Caribbean since 2006.
But the company has built around 300 properties and is being investigated by police, the Serious Fraud Office, and the Financial Services Authority in the United Kingdom.
Recently, around 40 investors served statutory demands on Harlequin for monies owed to them, which could have lead to a winding up petition if left unpaid.
Earlier this month, Harlequin said it has temporarily stopped work on a highly publicised resort in Barbados, citing an on-going US$13 million legal battle in Ireland over alleged misappropriation by a former contractor.
The firm also said that in a separate move it is restructuring its business operations in Barbados and has shut its offices there.