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Buccament resort’s financial management was ‘eye-opening,’ court hears

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Between 2006 and 2015, thousands of investors lost £398mn on Buccament Bay Resort and other related projects, the court heard during the trial of David Ames.

As part of her duties as an accountant at Harlequin, Adela Blake visited a development site in the Caribbean to assess the management accounts.

According to FTAADVISER, former Harlequin chief financial officer Michael Slade had requested the management accounts at the Buccament Bay development in St Vincent but had not heard back.

Blake was asked by Ames to visit Buccament Bay in May 2011 to get the management accounts.

According to Blake, there were no accounts upon her arrival and the bank accounts had not been reconciled since October 2010.

Bank reconciliations were provided two days into her trip, but the documents were “very worrying”.

“I noticed that they had written off differences,” said Blake.

In one case, this amounted to 250,000 East Caribbean Dollars – approximately $93,000.

Within a few months, most of the local finance staff were asked to leave, and the UK office took over bookkeeping.

In an email to colleague Jim Baker dated February 18, 2013, Blake expressed concerns that there were “significant inadequacies of the general book-keeping and lack of management review”.

She continued: “Virtually every account had errors in it.

Richard Kelly, from auditors BDO, sent a lengthy email expressing numerous concerns about the company’s accounts in April 2012.

As a result, he concluded that BDO was unable to obtain “sufficient appropriate audit evidence” to determine whether accounting was complete.

BDO later resigned as the company’s auditors, citing “lack of context and communication” as the reason.

Ames was interviewed twice, initially in 2013, and then in December 2015.

He denied he had in any way acted dishonestly, and continued to promote the Harlequin business model as a viable enterprise that he believed in.

CFO Slade undertook a high-level analysis called Project Eagle which ultimately found that the HMSSE business model was flawed and the company was potentially trading whilst insolvent.

A meeting was called in which Slade thought the team would be told the Ames family had agreed that the company should go into administration.

But instead, the directors of HMSSE were told that there was no reason to put the company into administration and Slade was sacked with immediate effect.

Buccament resort’s financial management

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