Indian Investors with Larionovo

Further to our previous blog on Irish overseas property agent, Larionovo, going into receivership, investors in the company's Indian developments will have been met with somewhat of a surprise this morning to find the following updated message on the company's website.

"Please be advised that Paul McCann was appointed Provisional Liquidator of Larionovo Limited on Tuesday 25th November 2008. If you have invested in a property development through Larionovo Limited but have not completed the purchase, please email ian.barrett@grantthornton.ie the following details:

Your:

1) Name

2) Address

3) e-mail contact details

4) Amount of money invested

5) Name of development

Kindly note that we will contact you by email by 12 December 2008 with an update on the position.

With regard to investors in the Indian development project the developer has indicated that he will return deposits to Larionovo Limited to be held in trust for investors. On receipt of these funds the Provisional Liquidator will in turn arrange for these funds to be returned directly to investors."

This final paragraph is worrying investors in the three Indian developments (Hill View, Cape Corinth & Green Valley) greatly as they have a number of fears. Firstly they feel that the money will merely be merged with the other debts of the company and never be seen by investors, despite assurances from Grant Thornton that this will not happen. They also feel that not all funds may have been transferred to India to begin with and that this will, obviously, affect the amount that may subsequently be returned to investors. The group has tried to get the liquidator to speak to them on this issue with no success to date.

An independent buyers group has also been formed for those with issues regarding Larionovo's Indian products. For further information email Karen Marshall on karen@maka.ie.

Update:

On Sunday January 18th 2009 the following piece appeared in the Sunday Times under the heading:

Agent borrowed €1m

The liquidator of Larionovo, the defunct estate agency, is investigating loans taken out by Ray Norton, the co-founder.

An Irish estate agent whose firm went into liquidation in November, leaving hundreds of buyers of overseas property out of pocket, took out “significant” director’s loans beforehand.

Ray Norton, who co-founded Larionovo with his brother-in-law, Andrew Brett, is understood to have borrowed more than ¤1m since mid-2007. A “large proportion” of this was loaned to Norton in the final six months of last year when the company’s business was drying up.

Grant Thornton, the company’s liquidator, is seeking a meeting with Norton to establish whether he took out the loans while he was aware Larionovo was nearing insolvency. The liquidator, which was appointed by a creditor, has said Norton’s firm sold few, if any, properties in the final six months of last year. It also wants to know why the company collapsed so abruptly given that its most recently filed accounts, for August 2007, showed reserved profits of more than €2m.

Investors who paid deposits on Indian apartments that were never built held meetings last week to establish how to recoup the estimated ¤4m they are owed. More than 300 Irish people, including a senior garda and a retired solicitor, invested in properties in Mumbai, India’s commercial capital. Sums deposited range from €5,000 to €112,000, with many buyers reserving multiple units, said Karen Marshall, speaking for the investors.

“We were told last year that we would all get our money back because the scheme wasn’t going ahead,” she said. “Larionovo said that there were problems with property rights for foreigners in India and difficulties with repatriating money out of India.”

About 30 investors got some or all of their money in the summer, but remaining buyers have had no contact from Larionovo since last month. The investors established that the money sent to Sigrun, the builder of the scheme in India, was returned. “We have a money trail leading to a company in Dubai called Profile, in which directors of Larionovo are involved,” Marshall said.

Norton, 38, and Brett, 48, are majority shareholders in the Profile Group and are directors of Profile Property in Ireland. Grant Thornton is trying to organise a meeting with Profile’s directors in Dubai.

Norton and Brett, who both live in Ennis, Co Clare, could not be contacted for comment.

You'll find the story in the Sunday Times here.

Larionovo Goes into Receivership

The Irish overseas property industry will be left reeling by another high profile casualty of the current economic crisis and the severe downturn in the Irish economy.

Well known Clare based overseas property agent, Larionovo, shut its doors for the last time on Tuesday evening and let go its 11 staff members based in Ennis and Baggot St., Dublin. The company was formed seven years ago by brother-in-law pairing Raymond Norton and Andrew Brett and had sold vast quantities of product in areas as diverse as Dubai, Hungary, Spain, France, India and Portugal.

The company was well known for its high profile campaigns on TV, radio and in the press, taking the sale of overseas property by an Irish company to a new level. Unfortunately, under current financial realities the company's business model would appear to have become redundant.

It's most high profile market was undoubtedly Dubai, where it strongly marketed developments in Dubai Sports City. The company featured on the front page of the property section of the Sunday Independent, edited by John O'Keeffe, on an extremely regular basis. It is generally accepted that the company had many hundreds of Irish buyers.

Larionovo has spent a good deal of time in the limelight recently for the wrong reasons. It was involved in somewhat of a furore back in July when the Irish Independent published an article declaring "... Larionova, the biggest and most high profile of the Irish foreign property agents, is also to shut up shop, amid difficulties getting payment from developers." Larionovo denied the allegations very strenuously and an apology was forthcoming from the newspaper but it's goose has since been cooked. No doubt the Indo will be anxious to report on the current chain of events.

The company was also the main Irish agent for Martinsa-Fadesa, the giant Spanish builder which filed for bankruptcy during the summer.

Larionovo has also been the source of much frustration, vented liberally on the Joe Duffy show last week, with relation to several projects in India that it decided to abandon. Purchasers in the Green Valley, Hill View and Cape Corinth projects, by developer Sigrun, have been promised refunds of their initial deposits, but many have not materialised yet and investors are, understandably, getting very worried. The subject is also the cause of much posting on various threads on the Ask About Money forum.

Larionovo's demise should not actually make much difference to clients who bought through them, as the company didn't build any property. All contracts should be with the developers from whom the property was bought and so, presuming the developers are capable of building the projects, should still complete. Clients will, however, obviously not receive any supplementary services which might have been provided by the agent such as furnishing, rentals, etc. There is also the worry that, with the agent now out of the loop, Sigrun may decide not to refund deposits collected by it. Only time will tell.

The receiver appointed is Grant Thornton. The message at time of posting, being shown on the Larionovo homepage is:

"Please be advised that Paul McCann was appointed Provisional Liquidator of Larionovo Limited on Tuesday November 25th. We are currently trying to establish the position of the investors with regard to the Indian development project. Please email ian.barrett@grantthornton.ie the following details:

Your: 1) Name

2) Address

3) e-mail details

4) Amount of money invested

Kindly note that we will contact you by email by 12 December 2008 with an update on the position."

An independent buyers group has also been formed for those with issues regarding Larionovo's Indian products. For further information email Karen Marshall on karen@maka.ie.

Any way you look at it this is another large nail in the Irish overseas property industry coffin which leaves no doubt as to just how fragile the market is at this point in time.

This isn't the end for Norton and Brett in terms of overseas property. The pair are also directors of Profile, a Dubai based company which is currently working on development work in the Emirate and has also been instrumental in the purchase and ongoing development of the islands of Ireland and Thailand in The World development in the Arabian Gulf.

There is a link to this story on our website here.

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