The affairs of Quantexa Ltd are now fully revealed as being riddled with fraud, theft, false accounting and deliberate misrepresentations as to regulation by The Bank of England
Why Corporate Compliance matters:
The application of "Real Intelligence" rather than Quantexa's brand of provenly inadequate "Artificial Intelligence" to the belated dilatory and demonstrably false and misleading filings of Quantexa and statements by its shareholders and directors (includng Colin Bell the CEO of HSBC Bank plc) reveals once and for all the Fraud that lies at the heart of Quantexa's business.
This has implications for the entire Global Venture Capital business that is now shown to have been deceiving investors for decades.
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The Facts:
On 18 March 2024 one of Quantexa's shareholders - Evolution Equity Partners (https://evolutionequity.com/) lied on its SEC filings when it stated that it is regulated by The Bank of England (https://adviserinfo.sec.gov/firm/summary/319748 Sch D para 1.M)
The Bank of England confirmed that is a lie and Mr Seewald and others were immediately informed but did not reply to the invitation to comment and deal with the matter without legal or regulatory redress.
The very next day Evolution pulled all its open fund raising.
A whistleblowing complaint is being made to the SEC and a copy will be made available shortly.
(the UK Government is a major shareholder in not only Quantexa but also one of the Evolution Funds that is also a direct investor in Quantexa - unreported double-dipping by The Secretary of State see British Patient Capital publicity statements at https://www.britishpatientcapital.co.uk/)
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Albion Capital Group llp runs a multitude of Funds of which 5 are Public Companies with a Premium Listing on the London Stock Exchange.
The Directors Report and the Audited accounts of Quantexa for the year ended 31 March 2023 both state that Quantexa raised $129,000,000 - £104,000,000 as its Series E of which only $99,000,000 was received by Quantexa and the remaining $30,000,000 was the sale of already issued Series A shares by existing shareholders.
Those statements are false, deceptive and were intended to deceive not only Quantexa's shareholders but also the shareholders of 3 of the 5 Albion listed VCTs who have been defrauded by the acts of Albion and its directors, aided and abetted by the Directors of Quantexa - including Colin Bell, CEO of HSBC Bank plc.
The audited accounts of Crown Place VCT plc for the year ended 30 June 2023 confirm a post year end sale of some Quantexa shares that realised £1,200,000. The accounts failed to show that this was a related party transaction/transfer to another but unlisted Albion Fund that required shareholder approval and was at a 20% discount to the amount stated in the audited accounts of Crown Place and Quantexa as shown by simple review of the Confirmation statement. All documents are available on Albion's website.
For the sole purposes of its own fees and self-promotion of its own business, Albion continued to report that its Quantexa shares were valued without any such 20% discount being applied.
Similar statements and valuations at a 20% unauthorised self-dealing discount aimed by the other 2 Listed VCTs is contained in accounts and Prospectus issued to induce further investment in Albion's VCTs and for Albion to obtain fees by fraudulent deception contrary to the Fraud Act 2006.
That is outright fraud by Albion Capital Group llp on the members of its VCTs.
NB The 4 Albion VCTs that hold Quantexa shares are all in breach of the 15% single asset limit imposed by HMRC. That has serious implications for those investors personal tax filings.
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Reconciliation of the £24,000,000 stated in the accounts of Quantexa to the Albion disclosures show that only £9,430,000 (less than 40%) related to Series A shares as stated by HSBC Bank plc CEO Colin Bell and his fellow Quantexa directors in the audited accounts.
It is to be noted that BDO llp was the Statutory Auditor to both Quantexa and all the Albion VCTs and approved the statements made by all parties despite knowing that the statements were false and misleading. BDO llp were then then immediately removed by Albion as Auditors to all 5 VCT funds as soon as the Crown Place accounts had been signed and approved by them.
Where is the missing £14,670,000?
The Confirmation Statement shows that some of the "Founders" sold some of their Ordinary shares but not for a period of many months after the Series E had closed. The details on the Register of Members provided to me on terms of strict confidentiality for copying only to The Secretary of State, does not provide any help in reconciling the missing money.
Any such transfers/purchases by existing shareholders do not qualify as assets for Venture Capital Funds in either the UK or USA (See Investment Adviser ACt 1940) that exist solely to provide NEW money to the company..
Even if the disclosed Founder share sales were taken into account as part of "Money raised by the Company" - which it clearly isn't - then each of those 33,364 shares shown as being transferred upto March 2024 would have been at a discount of nearly 25% (which does not accord with Quantexa's own records in any event) and would give an implied 25% reduction in the entire Quantexa value.
Some Unicorn!
Some in the Media and other VC funds tell me that "Funds Raised" in the "Series" will often include sales by Founders - that is clearly wrong and misleading and a deceit on those who enter into business dealings with the companies.
The Quantexa dealings go way beyond any concept of hype - legitimate or otherwise and even when approved by Rishi Sunak, the Prime Minister of the UK.
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And a couple of final thoughts ...
one of the Evolution Equity Partners "Private" funds stated to the SEC to be a qualifying Venture Capital Fund has 40% of its assets in secondary dealings of Quantexa shares which renders it ineligible for Exemption from Regulation. The one that is part owned by the UK Government has a similar but smaller problem with its dealings in existing and not newly issued shares.
Why does Evolution not disclose the legal entiities on its website? Is it because it is just a UK and EU registered trademark registered by someone named Seewald - but not Richard.
Why is Richard Seewald not disclosed under the PSC rules for the UK subsidiary?
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