CMG Fails To Answer Legal Questions

I know, the post title is pretty familiar at this stage, but this is a very different set of questions being asked by some serious people - Justice Finlay Geoghegan in the High Court to be specific. These questions have been thrown up by the liquidation of Flash Developments, which had been holding the contracts and money of investors in the Palm View Resort in Boa Vista, Cape Verde.

In a piece in the Sunday Business Post on June 27th Ian Kehoe claimed that the "High Court has ordered an investigation into property company Flash Developments, after evidence emerged that the company may have used deposits from buyers to finance the running of the firm."

It went on to claim: "It has also emerged in court documents that the company, which is headed by businessman Ciaran Maguire, may not have title over land in Cape Verde, where it had proposed to build a €100 million property scheme."

It also claimed: "documents filed last week by the liquidator, KPMG accountant Kieran Wallace, said that Flash appeared 'to have financed the general running of the company' from the deposits it received, rather than place them on secure deposit. "

The Insolvency Journal had the following on June 23rd: "The High Court also heard on Monday that the liquidator of Flash Developments Ltd, Kieran Wallace, is pursuing an investigation into representations made on behalf of the company which appear to suggest that the company may have taken deposits for villas and apartments when it didn't have the authority to do so.

The firm, controlled by businessman Ciaran Maguire, was placed into liquidation in May following a court petition by international recruitment firm Hays.

Flash Developments had received deposits from 200 Irish and British investors for properties in a proposed €100 million resort on Cape Verde. But speaking to the Sunday Business Post last month, Magure insisted that all of the deposits were safe, despite the wind-up of the firm, because all contracts, development lands and credit lines had been transferred to another company – the Ciaran Maguire Group."

These are very, very serious claims of fraudulent activity and we didn't feel it was right to put such claims on the blog, even though the claims weren't ours, without asking Ciaran for a comment on them. In fairness, he's been fairly forthcoming in the recent past, answering most of the queries we've put to him. So we did just that - and didn't get an answer. Instead his office responded to say he was in Cape Verde and would like to be given a chance to respond on his return.

So we waited, and waited, and waited. Still nothing.

Eventually, on July 13th Ciaran came back to us with the following: "I have just returned from Cape Verde and can confirm that building works are on going and I will furnish you with the updated pictures tomorrow. I can also confirm that the claims from Kieran Wallace are absolutely false and I am very much looking forward to outlining all the actual facts. I would also like to highlight that Kieran Wallace has no involvements in Ciaran Maguire Group and therefore has never seen any documentation in the Ciaran Maguire Group including contracts thus making these claims unfounded."

So we waited for the follow-up - but it never came. In fact, Ciaran has stopped responding to our emails completely for some reason so we've had to put up the post without further input from him.

Today (July 20th) the following appeared on the Boa Vista Experience Forum from the user CMG:

Dear all,

I would like to convey that under the advice from my legal team, I will no longer be in a position to post comments on this forum. Despite several requests to sit down with interested parties in both my office in Dublin and including making myself available to fly to the U.K. to meet with any interested parties, I have not received one offer. I have made it categorically clear that I was happy to answer all questions put to me.

Sitting down and having a face to face meeting would have given me the opportunity to outline and display the facts allowing me to furnish these parties with all the relevant documentation. I believe this would have allowed you to give a true reflection on Palm View Resort.

In light of the above my legal team have been working on logging and detailing all the posts made on this forum. It is now my intention to aggressively seek compensation for defamation and reputational damages. I would like to highlight to the careless bloggers on this forum that my legal team have now traced all the IP addresses and real names behind the identified bloggers and will be issuing the legal letters to the aforementioned.

The people on this forum who have made comments deemed to be defamatory please note; I intend to use these posts on this forum as evidence against you in a court of law.

In relation to the existing 200 plus clients and investors in Palm View; I would like to advise that my office will be furnishing you with updated pictures of on going works on site and general monthly updates. We are on schedule for completion in December 2011 and we can all look forward to seeing Palm View coming to fruition.

Regards,

Ciaran Maguire."

This follows a similar threat on the same forum on June 14th last. Following that post we were contacted by a number of posters on the forum who said Ciaran hadn't even got their country right in some cases.

This IP Address Tracking claim is a particularly strange one as most ISP's (Internet Service Providers such as Eircom and BT) these days provide clients with what is termed a 'Dynamic IP Address'. It is a system whereby IP Addresses are assigned randomly to clients as they are needed, rather than individual IP Addresses being assigned permanently, which is a very poor use of ISP resources. Consequently, most people's IP addresses change at least once every day and several times in most cases, depending on usage. This system makes tracking the IP Address beyond the region in which it is based (e.g. Dublin, Waterford, Cork, etc.) virtually impossible.

It is possible that those hosting the forum could trace the odd post back to a fixed IP Address (common in larger companies who have very heavy internet usage), but not very many of them. In the main they are, and will remain, totally anonymous.

Consequently, Ciaran's claim that he has the names of people posting on this, or any other forum, is absolutely bizarre.

In any case, we've always been very forthcoming with our interest in this particular development, Ciaran knows exactly who we are and the questions we've got. We've also tried to be fair to the developer and have given him every opportunity to put his side of the debate to the general public where possible. He simply seems to have decided not to do so in the last few weeks which is a great shame.

If Ciaran decides to change his mind on this matter and does email us with further information we'll be sure to put it on the blog post-haste.

Flash Developments in Liquidation

The following story appears in the Sunday Business Post of May 30th:

"The developer behind a proposed €100 million resort in Cape Verde has said that the project will not be affected by the liquidation of one of his main firms.

The High Court last week appointed a liquidator to Flash Developments, which is headed by businessman Ciaran Maguire. It has received deposits from 200 Irish and British investors for apartments and villas in the planned Palm View resort on the west African island.

Maguire told The Sunday Business Post that all of the deposits were safe, despite the winding-up of Flash Developments.

He said that all the ‘‘contracts, development lands and credit lines’’ had been transferred to another company called the Ciaran Maguire Group.

Maguire said that Flash Developments was ‘‘simply a sales and marketing company’’ and that its liquidation would not have any effect on the development.

He said that 63 per cent of the initial 400 apartments had been sold, and the scheme would be completed next year.

A number of people who paid deposits to Flash Developments for properties have already sought the return of their money, while others are putting together an action group to try to recover their money, following a 16-month delay in starting the project.

Flash Developments went into liquidation last week following a court petition by Hays, an international recruitment firm which was owed money by the firm. The liquidator, KPMG accountant Kieran Wallace, is examining the company and its links with the Ciaran Maguire Group.

He is seeking all details relating to the Cape Verde project. Maguire said that Flash Developments had lost a significant sum of money due to a bond deal with a now defunct British company called Exchange Insurance.

While this prompted the liquidation of Flash Developments, he insisted that the project was going ahead.

He said that the first phase of the development was valued at €100million and would include apartments and a five-star hotel. Maguire said Flash had a 15-year licence with the Cape Verde government to build on the island, and would ultimately build developments valued at €1.8 billion over that time."

Paul Coughlan's Prestige Group Nears the End Game

The Prestige Group, which describes itself as 'Ireland's Oldest Property Investment House' looks like it will be the next high profile casualty of the recession. 

The company claims to have placed €2.75bn in property investments since its inception. It has, in fact, only been involved in the overseas property market since 1998, at which stage the boom in Irish investors purchasing property in Spain was well underway. In fact the Irish mass market had, at that stage, started to move further afield to look at areas such as Portugal, Hungary and Florida in particular. 

A creditors meeting has been called for next Wednesday (March 18th) at the Stillorgan Park Hotel in Dublin. Some of the major creditors of the company include KBC (formerly IIB), the Bank of Scotland owned Ulster Bank and Bank of Ireland.

Prestige came to prominence in the early noughties when it sold huge amounts of off-plan property in Manchester and Budapest in particular. Many clients claimed, once they had received their properties, that they had been sold at very high valuations and the rentals achieved on them were far below those outlined by Prestige in its marketing documentation.

The company subsequently disappeared off the property sales radar for a couple of years and then, around 2006, a major PR push was instigated. The aim seemed to be to promote it's owner, Paul Coughlan, and the lavish 'high-roller' lifestyle he led. Toward this aim Coughlan appeared in a number of lifestyle magazines (most notably VIP but also a number of newspaper magazines) and a number of publications were invited into his lavish Foxrock home. 

In recent weeks posts have been appearing on a number of forums from frustrated investors who have not been receiving their rentals on properties purchased from the Prestige Group. There have also been rumours that he has been, to date unsuccessfully, trying to sell his luxury villa in Portugal. 

Coughlan's investment vehicle, Kaizen Property International, made somewhat of a comeback last year in the form of Touchstone Capital but this re-engagement with the overseas property market would appear to have been fleeting. The company sold apart-hotels in Germany and the UK as well as Below Market Value (BMV) property in the UK. 

The Prestige Group itself reappeared at the end of last year selling German Apart-Hotels, managed suites in Marbella and UK commercial property.

Further queries on the creditors meeting should be directed to The Prestige Group at info@theprestigegroup.com or +353 (0)1 2176300