Dolphin Trust GmbH Warns Investors of up to 12 month Payment Delays

In a letter to investors dated 2nd October 2019, Dolphin Trust GmbH confirmed that it was rebranding to the name German Property Group GmbH. Worryingly, they also warned investors that maturity payments could be held up by up to a year.  In the letter, Chief Executive, Charles Smethurst states:

“it is likely that maturity payments will be delayed by up to 12 months.” He goes on to blame this on wider factors such as “finalising building permits and legal titles, and arranging third parties such as constructors.” To reassure understandably anxious investors, he adds: “I must stress at this juncture that your capital investment is not at risk.”

TLW’s specialist financial mis-selling solicitors are regularly contacted by worried investors who have not yet received the returns promised from the scheme or who are struggling to get their capital investment back. Many did not realise and were not made aware by their financial adviser, that schemes like this can be high risk.

The TLW team have therefore been monitoring developments closely and as highlighted in our last Dolphin Trust GmbH blog, they confirmed that “no further interest payments” would be made to investors for the next 3 months. Instead, the interest will be paid in full at the end of the investment period. They also advised that they were “in discussions about the possible sale of properties where such a sale would be more financially beneficial to our clients than continuing with development ourselves.”

The maturity payment delays, interest problems and possible sale of properties that have not yet been developed, build a concerning picture for investors in terms of the returns they were expecting, whether there will be any financial losses and if so, the extent of those losses.

The latest letter appears to confirm the findings of an investigation by BBC Radio 4 which was featured on their “You and Yours” programme in May 2019.

The BBC investigation pointed out that some of the properties to be renovated and converted were unsuitable and would require far more investment than was projected. The report also questioned why investors had no details about the specific investment properties or information about commissions paid on these transactions.

To hear the full BBC programme, follow this link and log into BBC iPlayer.

Given his financial mis-selling experience, TLW partner Peter McKenna was interviewed on the BBC Radio 4 programme “You and Yours” and following this latest letter to investors, Peter comments:

“We have been contacted by many investors concerned about the viability of the scheme and this is just another worrying development. The level of commissions which was paid to those who introduced investors to Dolphin was, as we understand, around 15% – 25% of the amount invested and therefore a large proportion of the investors money was lost straight away.

Add to this the returns which investors were expecting, then it is easy to see why people are concerned.