On the inside

Sunday, 21st March 2010 14:42 - by Boredmum

I have been in a couple of houses recently where things on the inside just haven’t been what I expected. It got me thinking about shares and how some companies or individuals can gloss over things to the extent that what you see on the outside just isn’t what is really going on with the inside. Now some of these examples are extreme, but worth thinking about. I recently read of a person who defrauded his ‘Clients’ of hundreds of thousands of pounds. He was ‘Investing’ his Clients money. Now, I use the term ‘Investing’ loosely as he was really just keeping their money whilst sending false accounts so that his clients thought all was well. We have all seen recognised companies put out an RNS with an overly-positive spin on things. Many of us still remember Newport Networks and their fabulous contract. When administration came, we were all left thinking ‘What happened with that supposed contract’. I read the other day about a company called Langbar. They went to the extent of allegedly falsifying assets held, and they were a listed company. Six men were arrested in what was classed as a £420 million fraud on the AIM market. Yes, what we see on the outside isn’t always the true story of things happening on the inside. Unfortunately, when you start talking money, people can become quite sinister. Many people don’t have the experience or the time to trade or invest so employ someone to do it for them. I think it imperative that you check that person out; their qualifications, the length of time they have been practising, and if they belong to a long-standing company. I’m not really sure what we can do about the gloss or spin that companies put out. I’m sure there must be FSA guidelines around this? It is a good idea to check the history of the company Directors - I have a friend that has been investing for many years who stays clear of many companies just because of his knowledge of certain Directors. I’m sure the case of Langbar is extreme. I was horrified when I read the account of what had happened. The only thing I can say is keep your wits about you and dig a bit deeper, otherwise do we really know what goes on behind closed doors?