Their Review

Three members of HSG had a meeting with the SFO at their London Headquarters in November 2014. We furnished them with all of the information under the Evidence section of this site, along with a 900 page dossier that we had submitted to the Insolvency Service. We spent approximately 2 Hours in the meeting and provided additional files on CD listed at "Evidence" containing 20 folders. (This is important)

We complied with their further requests for information over the subsequent months and some 8 months later we received the below letter from the Senior Intelligence Officer.

"Firstly may I take this opportunity to thank you, and your colleagues for attending our offices on 5 November 2014 and for taking the time to fully explain the nature of the issues, which you had raised previously with The Serious Fraud Office, as well as with The Financial Conduct Authority, The Insolvency Service and others.

I would also like to thank you personally for your ongoing support since then, in providing the copious amount of documentation I required and the answers to numerous questions I have asked, during my assessment of the case over the last 8 or 9 months. 

During that time I have engaged with other law enforcement and regulatory authorities as well as with other SFO staff, who are expert in their chosen disciplines.

We have fully explored and reviewed the case, to establish whether or not it is a matter that should be recommended to the Director SFO for a formal investigation and we have concluded that there is insufficient evidence to mount an investigation, which could be capable of resulting in a successful prosecution.

I know that this decision will come as a disappointment to you and to the other members of the Hibu Shareholders Group. I fully respect your decision to refer the matter to us for review. It is a complex series of events, which we have considered over some period of time and not a matter we have dismissed lightly.

That the financial outcome for the shareholders of Hibu is in many cases catastrophic, is clear to us all and I can assure you that we fully understand how aggrieved you must feel with the circumstances of your losses. 

I am aware that you have previously felt aggrieved with short letters from law enforcers and regulators, who have similarly not taken the case forward and I hope I have addressed that to some extent, as we have liaised throughout the assessment period. 

It is however incumbent on me to include the criteria for a case to be taken on by the SFO as follows:

The SFO investigates and, where appropriate, prosecutes cases of serious or complex fraud (including cases of domestic or overseas bribery and corruption) which, in the opinion of the Director of the SFO, call for the multi-disciplinary approach and legislative powers available to the SFO. In deciding what cases to adopt, the Director will take into account all the circumstances of the case and consider:

Cases which undermine UK commercial/financial PLC in general  and the City of London in particular;

Cases where the actual or potential loss involved is high;

Cases where actual or potential harm is significant;

Cases where there is a very significant public interest element;

New species of fraud.

Yours sincerely"

We were naturally disappointed to receive the above letter, however, we were not at all surprised by it. Upon questioning the decision we were told that the SFO had spent "over 300 hours" looking at the case. All we can surmise is they did just that, look at it, because they carried out no detailed investigation , and during those supposed 300 hours, not one "Intelligence Officer" had noticed that the 20 files marked "Important Evidence" were in fact, completely empty! So much for thorough research from the SFO...

We took the decision letter to our lawyer at Covington & Burling, Robert Amaee, who gave a verdict that the SFO had applied completely the wrong test in assessing our case. Robert fully understood what the test was because he was  Head of Anti-Corruption, Proceeds of Crime, and International Assistance, at the Serious Fraud Office between 2009 and 2011. Robert commented that given the scale of the losses involved, and the fact that many members of the public had been affected, it should be "Inherently attractive to the SFO"

Robert also quite rightly stated that the SFO could use their powers under Section 2 of the Criminal Justice Act 1987 (as detailed here). It is also worth noting what power the Serious Fraud Office have under Section 2 of the Criminal Justice Act 1987 as detailed here.

Why did the SFO not launch an investigation with such compelling evidence?, Let's look at their criteria.

 This should be very evident, the fact that retail investors can be divested of their entire investment in a 50 year old, iconic British brand listed on the FTSE certainly undermines both the UK and the City of London as a safe and secure place for investing. We would love to hear from the Serious Fraud Office why they believe what happened in our case doesn't undermine UK PLC.

 Retail investors incurred actual losses into the hundreds of millions of pounds. Do the Serious Fraud Office not consider that loss high enough to merit a full investigation? Is there a limit that must be reached? Is thousands of investors losing all of their money through an orchestrated FRAUD, not enough?

Perhaps the Serious Fraud Office do not consider individuals losing their life savings, pensions and investments a serious enough effect of harm to warrant a full investigation? How about the economic and psychological impact of being so brazenly robbed of your hard earned investments?, do the Serious Fraud Office not consider this significant enough?

There is huge public interest in this because the ONLY remaining investors at the time of administration were members of the public and private investors. Not ONE institutional investor was left holding shares at the time of the administration. What information did they have that the public did not have? This cannot be a coincidence.  Perhaps the Serious Fraud Office can explain why this is not in the public interest. In total 7850 retail investors lost the ENTIRE VALUE of their shareholdings in the company. Yet the Board of Directors were rewarded handsomely for their part in this theft.

 This is certainly a new species of fraud, and perhaps unique in UK financial history. Hibu Shareholders Group were the first investors group to force an Emergency General Meeting of a FTSE listed PLC without any institutional support whatsoever. Moreover, we knew what was going on before it happened, and all of our hypotheses proved correct, from protecting the legacy Yell brand by a name change, to uncovering huge conflict of interests with the administrators. What more does the Serious Fraud Office need to consider this a new species of FRAUD?