Vashi Jeweller Faces Scrutiny as Investors Claim Fraud

The Financial Ombudsman Service has dismissed new submissions from investors asserting they were duped by the financial collapse of the luxury jeweller Vashi. This latest development has left investors frustrated, as they seek justice amid allegations of misrepresentation by the firm’s founder, Vashi Dominguez.

Vashi, which went into liquidation in April 2023 with debts amounting to £170 million, has become the subject of intense scrutiny. Investors claimed that they were misled about the jeweller’s financial health and the actual inventory levels within its stores located in London, Birmingham, and Manchester. Investigations revealed a stark contrast between Vashi’s declared stock value of £156 million and a subsequent appraisal that valued it at only £100,000.

The discrepancies extend beyond inventory value to the company’s reported sales figures. Initially, accounts submitted to Companies House indicated sales exceeding £100 million in 2021; however, internal documents disclosed that the actual sales for that year were a mere £5 million. This significant misrepresentation raises concerns over the firm’s financial practices.

Despite these alarming findings, the Financial Ombudsman Service maintains that the differences do not constitute sufficient evidence to prove fraudulent intent. A senior investigator noted that while the mismatch between the reported accounts and the genuine financial situation is troubling, it does not equate to definitive evidence of fraud.

Investors have submitted additional information, including assessments from forensic accountants who scrutinised Vashi’s financial records from 2019 to 2023. They argue that investment funds were misallocated, further raising concerns about the integrity of the company’s operations. A legal opinion from a criminal barrister has also been presented to the Financial Ombudsman Service.

Additionally, a group of investors alleges they were victims of an authorised push payment scam, where funds were diverted from their intended purpose. Despite their claims, the Financial Ombudsman Service has reiterated its original position, indicating that the matter will now be reviewed by an ombudsman. As the situation develops, the lack of response from authorities such as the Serious Fraud Office and the Metropolitan Police has intensified investor dissatisfaction.

The saga continues as investors, some of whom include notable figures like John Caudwell, founder of Phones4U, seek reparations from banks, arguing they should have acted on what they described as misleading practices by Vashi.