Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.
A lying London investment company that was exposed by The Mail on Sunday last August has been banned by the Financial Conduct Authority from carrying out any activities that need its permission, after investigators from the City watchdog found it was using a string of false claims to attract investors and win its FCA licence.
RC Watches, based in the Hatton Garden jewellery district, offered interest rates of up to 13 per cent, boasting that this was a ‘risk-free investment’, with investors’ cash ‘fully asset backed and capital protected’.
Funds borrowed from investors would help build up the business ahead of the launch this year of a scheme that would trade in luxury watches such as those from Rolex and Cartier – in effect, a unit trust holding expensive watches instead of shares.
The company was only authorised by the FCA to act as a credit broker, but having won approval for this and got its name on to the watchdog’s public register, it was likely that it would also get the nod for its planned investment fund.
Order: The firm is banned from offering investments needing FCA permission
However, my own enquiries last summer showed that although company records named the sole director of RC Watches as Gurpreet Sandhu, he was in fact a 62-year-old dentist from Sanderstead in Surrey, while the real boss in Hatton Garden was his son Timothy. And Timothy Sandhu, 35, had good reason for wanting to stay below the City regulator’s radar, after running an illegal share selling company seven years ago.
In 2017, The Mail on Sunday sounded the alarm over Incrementum Funding, which was marketing shares in a luxury watch company called Paragon Time Trading. Paragon collapsed soon afterwards, costing victims more than £400,000.
Because Incrementum Funding was operating without any authorisation from the FCA, victims had no access to the Ombudsman or the Financial Services Compensation Scheme. Its owner and sole director was Timothy Sandhu, now the real boss of RC Watches.
The FCA has issued RC Watches with a Supervisory Notice, saying: ‘The Authority has identified serious concerns relating to the firm in that its conduct appears to demonstrate that it poses a significant risk of harm to consumers.’
Before it licensed RC Watches, the regulator had been assured that the company was not looking for outside investors. In the wake of our report last August which revealed the exact opposite, the FCA immediately challenged the company, which replied that there had been a mix-up by its website provider, who had been working on a similar site for a different business.
However, muddying the waters even more, a few days later the FCA was told that RC Watches and the website offering investments ‘are not linked at all’. It was implied that the website might be a clone, impersonating RC Watches, and the email added that the company would back a public alert. When the FCA pointed out that this contradicted the earlier explanation of a mix-up, RC Watches claimed the explanation involving a suspected clone was an ‘error’.
By then the watchdog’s own investigators were increasingly suspicious. They arranged to meet the company’s supposed boss Gurpreet Sandhu on October 2, but a few days before the meeting his lawyers asked for questions in writing instead. A meeting was then arranged for October 17 but was also cancelled and rearranged for October 27.
Two days before the meeting, Sandhu’s lawyers admitted that he was not really in charge, saying that ‘the individual running the day-to-day business’ was in fact Timothy Sandhu.
This exposed the lie told to the FCA when RC Watches applied for FCA approval and claimed that Gurpreet Sandhu ‘carries out the running of the day-to-day business as sole director’. The lawyers then told the FCA that they would be attending the October 27 meeting along with Timothy Sandhu, but not his father Gurpreet. The meeting was cancelled.
FCA investigators then examined the firm’s bank statement and other records, and found that while denying it was offering investments, it had already raked in £214,500 from investors. RC Watches had told investors it would ‘use FCA regulated escrow providers with security trustees for your added security’ – yet the watchdog found investors’ cash had gone straight into the firm’s bank account, with no outside monitor involved.
Sandhu also inflated his company’s figures in investment documents, claiming that 2021 profits after tax were over £450,000, while the FCA found that a loss of around £155,000 was more likely. Investors were told that in the same year RC Watches spent £2.7 million on stock, yet the company’s bank accounts showed purchases costing less than £43,000.
So what happened to investors’ money? According to FCA investigators, there was ‘a pattern of investor monies being received by the firm, followed by substantial payments being made on the same day or shortly after’ to Gurpreet and Timothy Sandhu and to an unnamed third party who is suspected of being a salesman who pocketed a commission of around one third of the money he raised.
RC Watches is now banned from offering any investments or services that require FCA permission. Gurpreet Sandhu and Timothy Sandhu were invited to comment but did not respond.
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email [email protected]. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.
