GUARDIAN TRUST COMPANY LIMITED
THIS COMPANY IS WORKING WITH HENRY WOODS INVESTMENT MANAGEMENT THEY DO HAVE NOT HAVE A LICENCE TO OPERATE IN SPAIN.
The Jersey Financial Services is unable to protect Investors in Spain.
All of our members who have complained to Jersey Financial Services have been advised that they can do nothing other than refer them back to their Financial Advisor.
GUARDIAN TRUST WILL DO THE SAME, and refer you to your AGENT HENRY WOODS, be assured you will get no help from this company.
For the attention of Philip van Neste,
Guardian Trust Company
12 April 2004
Dear Mr Van Neste
I know you are already aware, as a result of previous correspondence, that the Costa del Sol Action Group exists. The Group is comprised of over 300 families who claim to have been missold or who may have been the victims of fraud by a number of unregulated financial advisers in Spain.
The Group's primary objective is to ensure that such unregulated Firms become regulated in the conduct of investment business, to provide at least some form of investor protection in the future or otherwise to ensure that they cease to trade thereby removing the risk of their activities to unsuspecting investors.
The Group has been successful to date in a number of areas in achieving certain of its objectives. The Group have established a working relationship with the Spanish regulators. The Group also wish to work with external (to Spain) regulators in an attempt to prevent abuses of local regulatory requirements and as such to ensure that unregulated Firms are unable to continue to cause serious financial hardship with seeming impunity.
The Group has employed a number of strategies to meet its objectives.
In recent advertising it is clear that Guardian Trust Company (Guardian) is working in collaboration with Henry Woods Investment Brokers. Indeed recent seminars were proposed to be held at which Guardian were to be guest speakers on behalf of Henry Woods, the organisers of these events. Action by the Group prevented the seminars going ahead as planned. We have also used the "mystery shopper" principle to obtain information on the activities of a number of Firms.
Whilst there is nothing to prevent Guardian from advertising its services in Spain (and in appropriate circumstances a trust arrangement is a desirable structure for certain individuals) there are certain issues related to Spanish tax obligations that are regulated in Spain.
As you know Jersey and Spain have both indicated that they will cooperate under recent Money Laundering agreements, which includes tax evasion in Spain. The Spanish Tax Authority (Hacienda Publico) has recently announced that, under the new Spanish Government, it intends to "crack down" on tax evasion as a primary target. Tax evasion (within prescribed limits) is a criminal offence in Spain. I know that the Jersey regulatory authorities, who regulate trust company activities there, will not wish to allow any risk of a loss of reputation for inadequate supervision by permitting trust companies regulated there to damage their excellent reputation.
If a resident of Spain (whether expatriate or indigenous) fails to declare his world wide income and assets for tax purposes then he is guilty of tax evasion. It may help perhaps if quote an example of the seriousness of evading tax:
"An individual who converts, transfers, assist with or facilitates any transaction involving the conversion or transfer of proceeds of crime, for himself or for a third party, directly or indirectly, with the aim of hiding the illegal origins of the funds, or any individual involved in protecting the perpetrator of the offence from criminal prosecution, shall be punished with a prison sentence of between 2 and 12 years."
Whilst a trust may be used in appropriate circumstances to mitigate Spanish Succession Tax (which in many areas of Spain is being abolished anyway) any person who is the beneficiary of a trust and resident of Spain is liable for tax on any income or gain made from the underlying assets.
In a recent article published in the Costa del Sol and written by Donald Nott of Henry Woods there was a clear inference that the provisions of the EU Savings Tax Directive could be avoided if an individual resident in Spain placed his assets in trust. Whilst it is true, at present, that income payments from a trust are outside of the reporting requirements of this Directive (or in Jersey's case not subject to the withholding tax) the beneficiary of any such income or capital payments is still required to report such payments for tax purposes in Spain (income, capital gains and wealth tax). The Action Group is now concerned that in addition to the claims of misselling made against Henry Woods that this Firm may now be recommending to their clients the use of a trust as a means of facilitating a transaction involving the transfer of funds for the purpose evading tax, a criminal offence. The punishment for such activity is significant. We have notified our lawyers of our concern.
The purpose of this communication is to warn you that any evidence the Action Group receive which indicates that this is the case will be reported to the appropriate authority immediately. The previous experience of advice from Henry Woods by large numbers of investors of has shown that this Firm has little regard for the law of Spain (they remain an unregulated entity) and we have compelling evidence of his inappropriate advice which has meant financial devastation for a large number of people. It is surprising that Guardian have chosen to be associated with an unregulated financial adviser also in the knowledge of the claims made against this Firm, for which Court Action is still pending in Madrid.
Do you consider it commercially sensible to retain your association with this Firm with all of the implications this holds for you as a reputable Firm?
I am copying this email to the Jersey Financial Services Commission and the Jersey Deputy responsible for the activity of the Jersey FSC so that they may be aware of the concern of the Action Group in this matter. In summary, it is not the services provided by Guardian that we fundamentally question but the association by Guardian with a Firm that is unregulated and which stands accused of serious accusations of misselling by a large number of individuals.
The Jersey FSC has stated:
"The objective of Compliance is to ensure that all entities regulated by the Commission are operating within international standards of best practice. These standards are laid down by the Commission in legislation, codes of practice and guidance notes. Compliance's primary role is to monitor and supervise regulated entities complying with such requirements".
I would welcome your comments
Costa Del Sol Action Group web site www.costa-action.co.uk