News - Uk
Categories: UK | VCTs / EIS
Octopus Investments has said it is working with the administrators of Glasgow Rangers after one of its investments was caught up in the debacle.
Octopus' Protected Enterprise Investment Scheme has a stake in Ticketus, which has bought up season tickets for future Rangers games worth £24m.
Octopus Investments clarified their arrangement with the stricken club, through their Ticketus arm, after Rangers' administrators revealed the money could not be traced in the club accounts.
In a statement Octopus said: "Ticketus is one of the many entities into which Octopus Protected EIS invests. Ticketus has purchased tickets for Glasgow Rangers games for a number of seasons in advance, as it has done for a number of years previously with the club.
"Ticketus does not lend money; Ticketus is the owner of assets - the tickets. Octopus is continuing to work with the administrators and Glasgow Rangers on this matter. We have no plans to make any further comments at this stage."
Administrators Duff and Phelps said they are trying to recover a £24m payment or loan from Ticketus for advanced season ticket sales which appears to have disappeared from accounts.
David Whitehouse, a managing director at Duff and Phelps said it is believed the payment was made to a parent company account rather than the club's account, and they were checking with lawyers that have worked for the firm in the past.
The loan is not secured against assets of the club but it means Ticketus is unlikely to be re-paid in full should Rangers exit the administration process, according to the BBC.
Octopus owns the £100m company Ticketus in its £500m Protected EIS product and used to hold it in its secure VCT, although the group confirmed this investment was closed a few months ago.
Octopus' company literature described Ticketus as "an example of a VCT qualifying company that has the characteristics that we will seek for investments. All the investments we make are into companies with lower risk business models.
Categories: UK | VCTs / EIS
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Oh dear
This blows the lid on the "protected" EIS/VCT market - the sooner people concentrate of the quality of the opportunities in the market and the investment team, and use the tax reliefs for what they were intended, i.e. to cushion the downside when real risk investments don't work out, the better. These "protected" schemes are sold on tax avoidance, offer no upside, but you can still lose all your money, in which case wouldn't you have been better off looking at what they are actually going to be doing with your money?
Posted by: Phil Marston
18 Feb 2012 | 11:10
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