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This is one of a few examples of Business Opportunity Watch Reviews which are available for the public to view on the public section of the website. The reason for making a small sample of the reviews freely available is to help potential customers decide if they want to subscribe, and also to communicate some matters of general interest arising in the case of some of the reviews. All the other reviews are available only to subscribers. A zero score or a low score means that in our opinion the business model or the investment model has flaws and/or that we have found inadequate evidence to back up claims about earnings, sales, profits etc. It doesn't mean this evidence does not exist and it doesn't mean that the opportunity is a scam and it doesn't mean that the promoters are unprofessional or dishonest. Questions arising are normally contained within the body of the review, and readers who are interested should contact the company with these questions and/or questions of their own.

1. Review of Passive Investments Ltd
Review from Business Opportunity Watch Reviews, September 2007 Issue 7

2. Subsequent Events

3. BOW Letter to Passive Investments
8th October 2008

4. BOW Letter to Passive Investments
19th October 2008

5. Response from Passive Investments
22nd October 2008

6. BOW Letter to Passive Investments
24th October 2008

7. Response from Passive Investments
28th October 2008

8. BOW Conclusions on Passive correspondence

9. Response from Passive Investments 25th November 2008 to BOW Conclusions

10. Correction re Maria Davies of Ladders of Success dated 16th January 2009

11. Latest developments per the Singing Pig forum

12. Latest developments per Guardian article

Extract from Business Opportunity Watch Rating Reviews
September 2007 Issue 7:

PASSIVE INVESTMENTS
Passive Investments Ltd
Andy Shaw and Greg Ballard
Nevada
London Road
Ashington
West Sussex
Tel: 01903 891100
www.passiveinvestments.co.uk

Review: 

Historically, BOW hasn't reviewed opportunities costing more than £10,000.  BOW is reviewing this one because a reader has asked for it several times and because there are a number of glowing testimonials on the Internet for the prime mover of the company, Andy Shaw, and his book Money For Nothing And Your Property For Free. The sources of the glowing testimonials include the following:

• Nicola Cairncross at www.asknicolacairncross.com

• Gill Fielding at www.passiveinvestments.co.uk and www.certainshops.com

• Judith Morgan of www.judithmorgan.com; and

• Simon Coulson at www.businessopportunityreview.co.uk).

This company offers a service which is very attractive to many property investors or would-be property investors, who have neither the time nor the knowledge to build or manage a property portfolio for themselves. 

What this company offers is to build you a portfolio of 5 small properties over a 6 year period.  They take care of all the management issues such as locating a suitable property, financing it, buying it, refurbishing it, finding a tenant and managing the property. 

Here's how the company describes its system:

"An initial fee is paid upfront to cover some of our costs in building a portfolio of 5 small properties over a 6 year period. We then put the Clients through a 'cycle' that takes around 12 months and we complete this cycle 5 times over the 6-year contract. The cycle consists of a property being sourced under value, currently at about 80k, with the knowledge it will revalue at considerably more, currently around 110k. The maths is the important part. We check the costs of purchase, refurbishment, refinancing, the mortgage to purchase, the refinancing mortgage and the rentals, now and later - everything is covered as well as possible to ensure the process will work.

The Client provides a 'purchasing fund', which is essentially the cash flow, for the whole project and provides this money to their 'portfolio bank account' as and when necessary to complete the 'cycle'. The Client provides the deposit, refurbishment and other purchase costs at the time the purchase is agreed. The process takes 4 to 6 months to complete on average. The initial goal is that the Client ends up with a refurbished property, with 15%+ equity and all their costs back from the remortgage to the higher valuation, meaning that this property is now free - apart from their initial fee. At the end of the 6 years they have 5 properties with equity, none of their own money in them, and the total out of pocket cost to them is the initial fee."

Sounds like a great idea.  Let's look at it in more detail.

One of the kingpins needed for this scheme to work as hoped is the company's claim to be able to buy properties in their area at "significantly under market value".  In the FAQ page of their website they explain their ability to do this as follows:

"As a large company operating in our area, the supply of under market value properties is self perpetuating; the more we purchase, the more we are offered. We've built a sound reputation with our large network of agents and property introducers over time, and these people know if they have a property needing to be sold quickly, whatever the reason, we're the people to talk to. Properties can be purchased under market value for a number of reasons: probate, divorce, sellers moving or emigrating, and upsizing or downsizing are just some of the many reasons we get offered property at less than it's worth. We try to help people wherever we can by offering a prompt exchange/completion or by repairing a chain."

On the Property Projections page, they explain that they use a figure of 8.5% for the projected growth in the capital value of the property which they say is mid-way between the 5.5% predicted by the government and the 11.74% which is the actual average for the past 30 years or so.  This figure seems a prudent estimate based on previous experience, but whether the property market will perform nicely to order in the coming years remains to be seen.

The second important assumption included in the figures, but not specified this time, is the assumed undervalue achieved on purchase.  For the five properties shown in the projections, this undervalue amounts to 25% for the first property, 25% for the second property, 22% for the third, 21% for the fourth and 20% for the fifth.  Why the projected undervalue decreases in this manner is not explained.

The net results of these projections is that at the end of Year 10 you have 5 properties worth a total of £1 million, and worth £1.5 million at the end of Year 15.  And all you have had to pay out is your initial fee.

Although it all sounds so wonderful and the two people running the company are experienced property investors and no doubt take great pains to offer their clients a good service, there are several worrying aspects to this offer as follows:

1. No mention of risk
   
   

   Perhaps because the two directors' experience of the property market has only been in this century's boom years, the directors appear to discount any risk.  Or, at least, I could not find any mention of risk anywhere on their web site.  I expected to find some mention of risk on the Terms and Conditions page, even if not mentioned elsewhere.  Sadly, the Terms and Conditions page does not mention risk, and neither does it give any Terms and Conditions.  All it says is that you will receive a legally-binding contract and a brief list of the issues that this contract cover.
   
   
2. £35,000 advance fee
   
   The company makes the incredible proposition that you pay them an initial fee of £35,000 to "cover the 6 year management and construction of your portfolio".  It is astounding to ask for a fee for services so far in advance, and no explanation is given of why this is necessary.
   
   It would be much more usual to pay such fees on a quarterly or annual basis.  Otherwise, what incentive does the company have to continue to offer a top-notch service to its "tied" clients?
   
   Anyone thinking of signing up with this company should, in line with standard recommended practice, have their solicitor look over the agreement before they sign it.  And one of the things the solicitor would be looking for would be some indication of the security of this £35,000 fee.  For example, one would expect to see arrangements for it to be deposited in a solicitor's account to which the client had title, with annual drawings being made from it, or perhaps some insurance bonding arrangement.
   
   
3. Interest rates
   
   Strangely, the interest rate page on the web site still says the same things it said several months ago in April 2007, i.e. "Since 1988, interest rates have been on a downward trend.  In October 1989, the rate stood at 15%.  In 1996 mortgage rates were at a 30-year low".  This is followed by a base graph which stops at 2005 with 4.5%. 
   
   There is no mention on the company's website that since 2005 there have been 5 quarter point increases, resulting in a total increase of 28% and the base rate now stands at 5.75%. 
   
   Moreover, there seem to be no figures on the site relating to rental yield and whether this now typically covers the repayments on a mortgage for one of their properties.
   
   
4. We do it all
   
   It sounds great that the company does everything for you, but there is a risk in this if you dispense with any assurances and safeguards. 
   
   The two most common complaints we have heard from novice property investors who allowed a property investment company to advise them are that the promised discount on purchase was more myth than reality; and the valuation of the rent that the property could be expected to achieve was overstated.
   
   These problems have sometimes arisen with seminar companies, who not only find properties (often flats in apartment blocks yet to be built) for clients, but also find them a mortgage and find them a valuer.  And there's nothing to stop the seminar companies from receiving a commission on the properties sold and on the mortgage, too.  All very incestuous.
   
   Whilst I am not making any suggestion that Passive Investments operates in a similar vein to some of the property investment companies/property seminar companies who have been criticised,  it is nevertheless true to say that you can't really call them independent.  After all, if you've given them £35,000 to find 5 properties for you to buy over the next 6 years, then presumably they are going to work hard to find these 5 properties for you, whether or not it is a good time to buy and whether or not they are able to find the very best deals.
   
   At the end of the day, it is foolish to place a very substantial sum like £35,000 as an advance service fee on the acquisition of an unregulated investment like property in the hands of a "do-it-all" company, however well-experienced and well-intentioned they may be, without having a second opinion on valuations from your own qualified professional valuer and without having safeguarding arrangements to ensure that you have the right to get the money back if there were to be problems in future delivery of the service.
   
   This is particularly so because Passive themselves say that their ability to acquire properties at a discount is the lynch pin of their scheme.
   
   Seminar company Inside Track themselves admit, as recorded in the For Info section of this issue, that "valuation is not an exact science", and indeed there seemed to be some quite large variations in valuations for properties purchased by their clients. 
   
   So if you sign up with Passive Investments, then get yourself peace of mind by obtaining your own valuation from a fully-qualified valuer who is someone of your own choosing who has no links of any kind with the company, and who is not on any "Recommended List of Valuers" which the vendor may offer.  That way, you know that your valuer is looking at your property with a fresh mind and has only had contact with yourself .  The valuation you get should be for both the capital value and the rental value of the property.  Indeed, Passive Investments themselves may well recommend that you obtain your own independent valuation from your own choice of valuer in any event, in line with best practice, albeit that there is no mention of this on the website.

In summary regarding this scheme, it is very finely-balanced and appears to have no margin for error either on the capital side or the income side so that if any of the variables do not perform to order - as is likely in real life - the scheme won't work, or won't work as expected.

The £35,000 advance fee - assuming that it is paid without appropriate security - removes any confidence Bow may have had in it.

However, anyone wishing to pursue it should, in addition to taking independent legal advice on the contract and independent valuation advice on capital and rental valuations of any proposed acquisitions, ensure that they have sufficient resources to tide them through hard times.

Gushing reviews

It's unfortunate that there are gushing reviews on the Internet from several life coach ladies, such as Nicola Cairncross, Gill Fielding, Judith Morgan and Maria Davies.  All these ladies are professional people in their own sphere, and it's worrying that they don't mention the need to have independent advice from a qualified professional person on an investment which, for many people, will probably be one of the largest they make. 

Neither do any of these ladies mention the need to have sufficient resources to tide you over hard times. 

Nor do they mention any caveats about the mind-boggling £35,000 6-year advance fee.  Instead, they just seem to say, "Andy's wonderful, so just pay him and let him get on with it".

Here's what Nicola Cairncross says on her website at http://www.asknicolacairncross.com/recommends/
Passive/booking.htm where she recommends that people go to a Passive Investments Property "Portfolio Builder" Open Day on 21st September 2007:

"Andy Shaw ... is probably the biggest property investing genius in the UK at the moment ... This is a personal note from Nicola Cairncross, introducing you to some very dear friends of mine. ... I first met Andy Shaw and Greg Ballard back in 2003 ... ! was stunned, and immediately said "my clients and mailing list would be SO interested in this!" ... I put on some Open Days at my hotel for them, and people beat my doors down ... We are all having property portfolios build for us by Passive ... It's really important to me to know that we can relax, knowing it's definitely happening, we are DEFINITELY going to be secure, financially free, even very rich, at some point in the future.  I can't tell you what that feels like after years of worrying about money (as anyone who knows my story knows).  And so I recommend them to everyone who wants to make money from property, but is too busy, or too hesitant to take those first steps themselves.

I recommend Passive because I know, like and trust them. I invest with them and recommend them to people I love and care about.

Take a look at what Andy has to say below. Secure one of the 5 VIP slots, they have given me for this free Open Day (you pay a deposit to secure your place, which you get back on the day).

Check them out, take some action and make it definitely happen. Join our gang.

Warm regards
Nicola Cairncross"

On his websites at www.andyshaw.com and www.propertyinvestmentsecrets.co.uk Andy Shaw promotes an affiliate scheme about which he says, "Earn Serious Commissions By Promoting My Very High Converting Property Investment Book... And Share Some Very Easy, And Very Significant Recurring Income". In evidence of this claim, he states in a PS that "A JV partner of mine, Nicola, made over £60,000 just by recommending our service to her list".

Maybe the £60,000 Nicola is a different Nicola, but in a testimonial on the same website, Nicola Cairncross says, "Andy has helped me transform my businesses and my life. It's not just about money ... I would do anything for Andy, and anyone he holds dear. Ignore him at your peril as your financial and personal life will be very different if you move into Andy's orbit."

This is what the Passive Investments web site says about Gill Fielding:

"We were persuaded by an acquaintance Gill Fielding, who has now become a very good friend, that our product IS superb but that we were not explaining it very well at all. We were not showing people the enormous benefits to them which we knew were there. We were not making clear to people what a big deal this really was.  Gill offered to explain it to people for us at some Open Day Presentations, and didn't want to be paid to do this for us, she saw our product as a way of helping her on her mission; which is to 'light the spark of financial intelligence' in people. She then paid us the compliment of becoming our Client, going on to present us as she saw us from both the view of a Client and a friend."

Gill Fielding is a Chartered Accountant, a qualified teacher and coach.  She manages "The Wealth Club" through a company called The Wealth Company Ltd and "Very soon!  Gill is in a well-known TV documentary on Channel 4."   Nicola Cairncross's website reveals that this documentary is called The Secret Millionaire.

This is what Gill Fielding says on the website at www.certainshops.com: 

"I became a Passive Client in early 2005. I bought my first property through them in July 2005 at £82,000, they spent just £2,000 doing it up and it was re-valued 6 months later at £110,000. At that time I drew out £23K and there has always been a tenant in the property. I am now eagerly awaiting property number two. I really like what Passive Investments do for two reasons, firstly, I know from my own experience as a Chartered Accountant and as a presenter of financial information, that the basic type of properties they buy - i.e. the 1 and 2 bedroom flats and houses, over time produce the best return on my money both in terms of income yield and capital growth. Secondly, I don't have to do anything!

This is brilliant for me as I am a busy person with my own business and a hectic family life, with a husband and 3 kids and I just don't have the time to build my property portfolio very quickly. So I am delighted to say that I've never even seen the property I've bought from Passive but of course I have seen the profit, so I can't wait for the next property to arrive!
Gill Fielding"

Normally, Chartered Accountants are very hot on advising their clients to do due diligence, on advising them to obtain independent professional advice, and on doing due diligence themselves.  Indeed, these are basic elements of the "financial intelligence" which Gill says is her mission. On this occasion, it seems to have been somewhat overlooked: Gill Fielding's due diligence did not extend to seeing the property before she bought it.

Another "Personal Wealth Coach" effusing over Andy Shaw is Judith Morgan of www.judithmorgan.com who says:

"Andy Shaw is The Man, the brains behind the UK Wealth Creation Community to whom all the Movers & Shakers go for advice about any investment opportunity we don't understand, are not sure about, or over which we would like him to cast his analytical eye. And he is abundance personified. He reviews our propositions and offers up a complete review, frequently with some sharp directional advice thrown in - which we sometimes don't like, but always know is for our own good".

Like Gill Fielding, Judith Morgan seems to have left her brains and all professional procedures behind when it came to Andy Shaw's offers. (According to her website at www.judithmorgan.com, Judith Morgan - like Gill Fielding - is or was an accountant. "At the age of 22 I started my own accountancy firm which I sold twenty years later for an undisclosed six-figure sum.") With all that business experience, how can it be that she failed to caution people against paying an advance fee of £35,000 without a rock-solid guarantee backed up either by insurance or a certified cash deposit?

Previous business activities of Andy Shaw and Greg Ballard

I thought I had just about finished with what I had to say about this company and its offer, save for my own usual due diligence check of records at Companies House, and I was going to rate it 2 out of 10. However, I had been intrigued to read the references on the web site at www.passiveinvestments.co.uk about the "traditional business employing over 100 people" which Greg Ballard and Andy Shaw used to run together.  I found it curious that they did not say what kind of business it was and this suggested that it could be worthwhile to find out. 

I noticed from the photograph of the "Ashington Office" on the website that, behind the big Bentley, the big Mercedes and the expensive-looking sports car, the office seemed to be a posh bungalow with two enormous conservatories built on the side.  "Double-glazing" sprang to mind. 

And the references on the web site to "Home visits" where "you'll have the delight of Greg coming to visit you and discussing all the options open to you" made me wonder whether he used to be a double-glazing salesman, since home visits are methods used by some double-glazing companies. I was right - a lot more right than I had bargained for. 

A visit to Companies House revealed not one double-glazing company but a string of them.

5 current directorships are shown for Gregory John Ballard, all in companies which appear to be in the property field.  Also shown are 14 previous directorships in companies which have now been dissolved.  Some of these companies never traded, others traded and were dissolved in a normal fashion with no creditors, but three of the companies were dissolved following creditors' voluntary liquidations.   

Andrew Malcolm Shaw has 7 current directorships, a number of which are in the same companies as Greg Ballard, and which also all seem to be in the property field.  Like Greg Ballard, he has a long list of 13 previous directorships in companies which have now been dissolved, many of these being the same companies as those shown for Greg Ballard.

The three companies wound up by creditors' voluntary liquidation are as follows:

• B.M.E., a company which manufactured and installed double-glazed windows, went into creditors' voluntary liquidation on 4th March 1999 owing £191,236.  Andy Shaw was a director from 1st April 1998 and Greg Ballard was a director from 5th February 1999.
  
  
• Shortly before B.M.E. went into liquidation, a new company, Mainmex, was set up to carry on the business of double glazing manufacturer on 3rd February 1999.  Andy Shaw was appointed a director on 5th February 1999 and Greg Ballard was appointed on 1st August 2000.  Sadly, Mainmex itself went into creditors' voluntary liquidation on 27th May 2003 owing £857,221. 
  
  
• Planmax, a company which had been dormant until 31 May 2003, was then activated to carry on the business of glazing installation.  On 8th July 2002 Greg Ballard had been appointed director and Andy Shaw secretary.  Woefully, this too went into creditors' voluntary liquidation on 8th March 2005 owing £55,092.
  

A fourth company, another manufacturing company called Brytex, which had been set up on 18th November 1998, was put into compulsory liquidation by the Official Receiver on 2nd June 2003 upon the petition of a creditor. It's still in the process of liquidation.  Andy Shaw was a director of this company from 26th July 1999 and Greg Ballard was a director from 1st August 2000.

Both Andy Shaw and Greg Ballard were previously directors in three other companies involved in building installation and trades construction and these companies are still active.

Happily, the property companies seem to be faring better than some of the double glazing ones: they're all still active.

Past and present directors of Passive Investments

Companies House records did, however, reveal unexpected directorship arrangements with Passive Investments Ltd itself.  Andy Shaw and Greg Ballard hold themselves out as running the company ... or, at least, this is what I thought because they are featured on most pages on the company's website; and they say that that are the people who invented the "Property Buying Machine"; and they are the people who do the seminars; and one of the offices is at Andy Shaw's home; and they are the people who are the authors of the "Passive Investments - Looking Forward" page and the "Mission Statement" page; and, finally, they repeatedly refer to themselves as "the partners of Passive".

I was wrong.  Companies House records show that they have never been statutory directors of the company.

The other person they describe on the web site as their "partner" is Adrian Daniels who "manages the overall finances of the company ensuring that all financial matters are accounted for".  Whether he still does so is unclear, since he recently resigned as director on 27th August 2007, after being the sole director of the company for a year, following the resignations of two other directors. 

The current director is Philip William Doolan, who was appointed at the end of August 2007 on the day Adrian Daniels resigned. 

This seems to be the same Phil Doolan whose profile is shown on Andy Shaw's website at www.ourgifttotheworld.com (a scheme set up by Andy Shaw for making donations to charity by means of keeping a free item on your desktop but which cannot be explained further because "right now we have to keep the details of exactly how it will work secret because someone else could grab this idea").  On this website Phil Doolan says that he used to work for a local building company as their depot manager and, "I quit my "normal" job back in July last year and I have been working on building my own web based businesses". 

On his website at www.phildoolan.com he says, "Hi, Thank you for visiting my site   Last year I quit full time employment and decided I was going to make money online and have a better life!  I started without even the knowledge of how to build a website. Now I make money from various different sources such as Affiliate Marketing, Adsense, Consultancy, Joint Ventures as well as my own products." 

On Andy Shaw's website at www.andyshaw.com, Phil Doolan gives a testimonial headed "I totally trust Andy with everything".

It would seem, then, that Phil Doolan was appointed as the sole director of Passive Investments on the strength of his internet skills rather than due to his experience of the property market or financial management.  Hopefully, however, he will be able to buy-in the appropriate expertise, and with the time-unexpired portions of customers' initial £35,000 fees still sitting securely in the company's bank account or a fiduciary account - as is surely the case - he won't have been suddenly landed with too difficult a task.

The first and only accounts which Passive Investments Ltd has so far lodged at Companies House (for the period from 18 May 2005 to 31 March 2006) show that the turnover was £1,130,148, out of which the profit was £121,178.  The accounts don't throw any light on any fiduciary or bonding arrangements which there may be in respect of clients' £35,000 initial fees.

It is worrying that the two men whose names are associated with this company have never had any statutory responsibility for it, and more worrying that the third man who was involved in the company from the outset has recently resigned.  And there's no explanation on the web site.

I'd intended to rate this offer at two out of ten before I looked at the Companies House records: now, it gets zero.


Rating:

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BOW Notice: A zero score or a low score means that in our opinion the business model or the investment model has flaws and/or that we have found inadequate evidence to back up claims about earnings, sales, profits etc. It doesn't mean this evidence does not exist and it doesn't mean that the opportunity is a scam and it doesn't mean that the promoters are unprofessional or dishonest. Questions arising are normally contained within the body of the review, and readers who are interested should contact the company with these questions and/or questions of their own.

__________________________________

2. Subsequent Events

Subsequent events since this review are as follows:

1. Increase in the six-year advance fee
   
   The company's six-year advance fee of £35,000 has now gone up to £37,500.
   
   
2. 2007 accounts show no liability for the unexpired parts of six-year advance fees received
   
   Passive Investments Ltd has filed its accounts for the year ended 31 March 2007. Although the turnover is healthy at nearly £2 million, the administrative expenses are high so that the profit for the year is only £161,365.
   
   Curiously, in the balance sheet, it seems that nothing has been carried forward for the time-unexpired portion of the payments of £35,000 for the 6-year service fees which presumably make up most of the turnover.
   
   The accounts are unaudited so that, according to the Directors' Report, "The directors are responsible for maintaining proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 1985."
   
   How can the company's position be accurately recorded if its liability to provide services for 6 years is not shown? After all, the company is going to incur costs over the six years - such as salaries for the people providing the services - and one would have thought that some of the up-front fees should have been carried forward to cover these costs.
   
   Indeed, the company itself says that this fee "covers some of our costs in building a portfolio of 5 small properties (namely 1 and 2 bedroom flats) over a 6 year period... The up front fee we charge is merely a cost covering exercise for the company and this covers the actual costs associated with the construction and management of your portfolio".
   
   BOW wrote to the company about this, and you can see their response below.
   
   
3. Change of directors
   
   There has been a change of directors. Philip Doolan resigned on 11th February 2008 and on the same day Gregory John Ballard and Andrew Malcolm Shaw were appointed. It's good to see that Greg and Andy now have statutory responsibility for the company that they have run from the outset.
   
   
4. Financial assistance of "up to £342,962.50"
   
   Two weeks after Andy Shaw and Greg Ballard became directors, Passive Investments Ltd gave financial assistance to another company to acquire 22 of its shares.
   
   This financial assistance took the form of a loan agreement for "a sum of up to £342,962.50".
   
   The company which bought the shares is Aberon Limited, which has 100 issued shares of which Greg Ballard and his wife jointly own 50 and Andy Shaw and his wife jointly own the other 50. The two directors of Aberon Limited are Greg Ballard and Andy Shaw.
   
   Aberon Limited is quite a new company - it was only incorporated on 30th July 2007 and it has not yet filed any accounts.
   
   Quite how Passive Investments Ltd can afford to give such a loan is not clear from its latest filed accounts - those for the year ended 31 March 2007 - because its total shareholders' funds only amount to £260,143.

Amazingly, the company's website still gives the same projections for growth in property values and says (as at 6th October 2008):

"There are several figures used for calculating growth on property. At Passive we like to be as realistic as possible so we use a figure of 8.5%."

Here's BOW's correspondence with the company asking for their explanations:

3. BOW Letter to Passive Investments 8th October 2008

Dear Sirs

Business Opportunity Watch is an online magazine which analyses and assesses all manner of earnings opportunities which are advertised to the public, such as business opportunities, non-FSA-regulated investment opportunities, and opportunities for betting on the financial markets, on the horses etc.

A reader asked for BOW's opinion on Passive Investments last year and the review was published in the September 2007 issue of BOW, rating it zero out of ten.

One of the reasons for this low rating was the six-year advance fee charged by the company. At the time of the review, this was £35,000 and I see that it has now increased to £37,500.

This is what you say on your website about the advance fee:

"This is the fee that covers the 6 year management and construction of your portfolio. This fee is currently £37,500. The fee covers some of our costs in building a portfolio of 5 small properties (namely 1 and 2 bedroom flats) over a 6 year period."

I'm writing to you now because, from the company's accounts, it seems that these advance fees have been taken entirely as income for the year of receipt, rather than being carried forward and only brought in as income on a year-by-year basis over the six-year period to which they apply.

Is my interpretation of the accounts correct, and if so how can it be said that the accounts meet the directors' obligations to "disclose with reasonable accuracy at any time the financial position of the company"?

This is clearly a matter of concern because your customers have a right to six years of services from your company and their fees are intended to cover your costs over a 6-year period, as you say yourselves.

Moreover, the company has now given financial assistance of "up to £342,962.50" to a new company Aberon Limited owned by the directors of Passive to enable Aberon to buy 22 shares in Passive Investments. Since Passive's accounts for the year ended 31 March 2007 show total shareholders' funds of only £260,143, how can Passive have afforded to give this financial assistance when it already has - apparently undisclosed - financial obligations for the next six years to its customers?

The auditors for the 155(6)a Declaration [who were not the company's normal accountants] were obviously happy on this point, because they are required to take into account "contingent and prospective liabilities of the company".

Because the company is several months late with filing its latest annual return, I haven't been able to confirm the current shareholding position.

I look forward to hearing from you.

You can see the review at www.businessopportunitywatch.com/BOW Review of Passive Investments.htm

Yours faithfully
BOW

BOW Letter to Passive Investments 19th October 2008

Dear Sirs,

I didn't receive any reply to my letter of 8th October.

The review has now been published and you can access it at http://www.businessopportunitywatch.com/BOW Review of Passive Investments.htm

In accordance with Business Opportunity Watch's Terms and Conditions and particularly those for Right to Reply, if there is anything you believe is incorrect then let me know and it will be changed. And/or if you wish to make any statement for publication, then this will be added to the published review.

Yours faithfully
BOW

Response dated 22nd October 2008 from Passive Investments

Dear Ms. Owen,

Further to your recent fax regarding the review of Passive Investments that currently sits on your website www.businessopportunitywatch.com, I am pleased to answer all of your questions and those of the singular reader who has provoked your investigation. I am further reassured that this response will be printed in full on the website so that any misunderstandings you, or your readers, might have can be clarified. I am also pleased that you will up-date your report and remove references to old addresses, and photographs which may have led to misleading interpretations of our business.

It is always a shame that so often well-meaning 'public service' websites and television programmes, such as your own, publish the results of their research without speaking to the companies in question. Inevitably, because of this, their opinion tends to be a little one sided. But you are running a business and I fully understand that you need to be "sensationalist" to sell membership to your site and to your reports, after all, we all know that dry and dispassionate reporting is less likely to attract attention.

I am responding because it is important that we get the facts straight, not least because our valued clients, and their professional advisers, might come across your site and could possibly feel unsettled by your allegations and tone.

Our professional advisers, who you refer to in your letter, might choose to take issue with some of your interpretations, so I would like to reassure anyone who might read this, that Passive Investments operates with full transparency under the knowledgeable and legal advice of respected firms of accountants and solicitors at all times.

The most important point to make is that Passive Investments is NOT a business opportunity, it is NOT a home-working project, it is NOT a way to make extra cash fast, and should never be categorised as such under any circumstances. You say yourself that you do not normally review 'business opportunities costing more than £10,000' so it is rather misleading of you to go ahead and review our business under the same criteria that you normally apply to these other opportunities.

Let me be clear, Passive Investments is an investment management business and property is purely the investment vehicle that we have chosen because of its historically proven return over the long term.

Secondly, it is important that I stress that our investors are part of a small number of individuals who 'buy' a place within our limited number of investment slots. These individuals are frequently astute professionals (accountants, dentists, doctors and so on) who recognise that they want to invest their money in a scheme that delivers a far higher potential return than traditional methods. They understand this is an investment strategy - not a business opportunity - and they can afford to pay the £35,500 six year advance fee for us to manage the programme for them, because they do not have the time, or the expertise, to do it for themselves. They do not need to see the properties (unless they wish to of course) because they will never live in them. The only factor they care about is the long-term asset value.

This is why we are called Passive Investments - we manage everything for our clients on a full time, on-going basis across their growing property portfolios. This includes: researching suitable areas and sources of good investment properties; identifying suitable partners to locate under-valued properties and managing those relationships for the benefit of our investors; selecting suitable properties at the right time in each client's investment cycle within their six year plan; handling all of the legal aspects of purchasing each property; co-ordinating the refurbishment; arranging the remortgaging at higher values to release funds back into the client's bank account; managing the letting process; providing regular portfolio reviews; maintaining close relationships with our clients that can enable financial flexibility to suit their needs .... and so on.

It is this on-going professional and experienced management of individual property investment portfolios that they buy with their advance fee. Indeed, we have some clients who have purchased more than one place on our scheme, and others who have 'attached' a second portfolio as they see their first one progressing satisfactorily.

Now let me deal with the individual points of relevance that you highlight on your site and in your letter:

a) Website Statistics. I admit that our website Property Projections page is out of date and our team are examining how we can best manage that information. I am sure however that you will understand recent fluctuations have made it difficult to be accurate at all times. We have based the figures on underlying historical trends that can be proven, even allowing for property booms and crashes, but we will find a way to improve and clarify this area to the benefit of site visitors. We will also look at improving our explanation of interest rates and rental yield.

b) Risk. The risk associated with this investment is clearly explained to our clients who, as I have already stated are professional and savvy individuals that can afford our services. We always advise our clients to take independent legal advice and our contracts are checked by their solicitors.

c) Passive Investments' business model: We cannot be compared to Inside Track or other property investment companies that sell 'off plan'; this is not our business model.

d) Client advocacy: The comments from clients that are on our website are genuine and unsolicited. We invite all new clients to read these case studies in more detail to learn how our investment programme works. These are professional business people who thoroughly checked our services before committing to a portfolio with us. They will be dismissive of your observations regarding their due diligence.

e) Directors' Background: All of the businesses with which the key directors Andy Shaw and Greg Ballard have been involved, past and present, have been managed legally with appropriate professional advisers. Other changes in directorship have been for private reasons - these may be personal ones, or due to other commitments.

f) Security of £37,500 for the six year management fees. It is clearly stated that this is paid up front and is non-refundable. It is our choice, within legal accounting principles, to allocate and use these funds in whatever period we deem appropriate.

I hope this clarifies the issues you have raised. If the particular reader who raised some of these questions needs further clarification on any specific point perhaps they would like to get in touch with me on steve@passiveinvestments.co.uk.

Yours sincerely

Steve Howson
Head of Client Services
Passive Investments

BOW Letter to Passive Investments 24th October 2008

Dear Mr. Howson,

Your reply has now been published in full on the BOW site.

However, a few loose ends remain.

Could you please confirm whether the company borrowed money from Barclays Bank against the new debenture of 14th November 2007 which gave the bank a fixed and floating charge over all of the company's assets?

If so, was this money used for normal trading purposes or was it used to lend to the new company, Aberon Ltd (whose business is stated as that of "Holding companies including head offices" and which is owned 100% by Andy Shaw and Greg Ballard) so that Aberon could buy shares in Passive Investments Ltd?

Could you please also confirm who owned the 22 shares in Passive Investments which were purchased by Aberon in February 2008 with the loan from Passive Investments for "a sum of up to £342,962.50"? The reason why I need to ask you this question is because the company's Annual Return for the period ended 18th May 2008 should have been filed at Companies House on 15th June 2008, but it is 4 months overdue.

Presumably, the directors have a positive view of the trading outlook for Passive Investments despite the big problems faced by the property market, because a price of £342,962.50 for a minority shareholding (22%) implies that the company is worth substantially more than £1.5 million. Would you like to make any comments on the current trading outlook for Passive Investments? If there has been new finance, then will this help?

Yours sincerely
Marian Owen

Response dated 22nd October 2008 from Passive Investments

Dear Ms. Owen

Thank you for publishing our reply on the BOW site.

As we have already clarified, Passive Investments provides an investment strategy for a relatively small number of individual clients all of whom fully understand the nature of our products and services. It is not a "business opportunity to be run from home" nor a mass market product and it is misleading of you to include us in your comparison website.

May I politely point out to you that how we choose to run our company is our own affair - we take our financial and legal obligations very seriously indeed, and our responsibilities towards our clients, employees and suppliers are foremost at all times. I am not prepared to enter into any kind of protracted correspondence about private company matters - so our correspondence is herewith concluded.

Any private investor, or visitor to your website who wants more information about Passive Investments, is welcome to contact me personally.

Yours sincerely
Steve Howson
Head Of Client Services
Passive Investments

BOW Conclusions on Passive correspondence

1. As Steve Howson says, the reference to "business opportunities" in the first line of the BOW review of Passive Investments is confusing. It was a mistake, and the word "business" has now been removed so that the opening sentence now simply reads as follows:

"Historically, BOW hasn't reviewed opportunities costing more than £10,000." 

2. As is clearly explained on this website, BOW reviews the whole range of opportunities to make money which are marketed to the public, and this includes business opportunities (e.g. home business opportunities, Internet business opportunities, network marketing, franchises etc.), gambling opportunities and non-regulated investment opportunities. Passive Investments falls into the category of non-regulated investment opportunities.

Steve Howson says, " ... it is rather misleading of you to go ahead and review our business under the same criteria that you normally apply to these other opportunities".

But it isn't misleading at all because the criteria which BOW uses to analyse all opportunities are clearly explained on the About page of this website - and these criteria are equally valid for non-regulated investment opportunities as they are for home business opportunities or gambling opportunities.The key criteria which BOW uses for analysis is whether there is any evidence to support the promises and claims which the promoter makes for his opportunity.

3. Steve Howson says that, "It is always a shame that so often well-meaning 'public service' websites and television programmes, such as your own, publish the results of their research without speaking to the companies in question".

BOW doesn't generally speak to companies prior to publication for the simple reason that its research is based on information which has come from them in the first place in the form of their own marketing material and/or on information which is otherwise indisputable because it comes from an official source such as Companies House.

It's also notable that, despite Steve Howson's complaint on this point, in his letter he has not provided much information which was not already given in the review.

4. Steve Howson says that " ...our investors are part of a small number of individuals who 'buy' a place within our limited number of investment slots ... a relatively small number of individual clients all of whom fully understand the nature of our products and services. It is not a "business opportunity to be run from home" nor a mass market product".

In fact, however, this investment opportunity was quite widely marketed through the web sites of the life coaches referred to at the beginning of the review, and it was also marketed to the business opportunity market through Simon Coulson's website at www.business-opportunity-review.co.uk. The marketing generally took the form of sales of Andy Shaw's book Money For Nothing And Your Property For Free, which promotes his company's services. Also, the company was running regular open days at a hotel near Heathrow airport.

It is, however, true that the company has a relatively small number of investors. Although the turnover in the 2007 accounts was nearly £2,000,000 this only equates to 57 new investors paying £35,000 each - and, in fact, the number of new investors would have been smaller than this because part of the £2,000,000 would have come from additional fees charged by the company for managing refurbishment etc.

Perhaps a lot of people attending the seminars blanched, like BOW, at the idea of paying a six-year advance fee?

5. Readers can judge for themselves whether BOW's reporting is "sensationalist" as Steve Howson claims. What is sensational, though, is the six year advance fee. And the string of double-glazing companies is rather eyebrow-raising, too.

6. Regardless of whether you are going to live in it or not, buying a house without even going to see it first seems a cavalier way to treat such an important investment.

7. It's good to know that Passive advises its clients to take independent legal advice. However, the kingpin of the Passive scheme is the company's claim to be able to buy properties at "significantly under market value" and the projections they quote are based on acquisitions at major undervalues of between 25% and 20%. Steve Howson's letters are silent about whether Passive also advises its clients to take independent valuation advice on the capital and rental values of the properties.

8. Regarding the £37,500 six year management fees, Steve Howson says that, " It is clearly stated that this is paid up front and is non-refundable. It is our choice, within legal accounting principles, to allocate and use these funds in whatever period we deem appropriate."

He seems to have missed the point that Passive Investments itself says that it has liabilities (i.e. not just contingent liabilities, but actual liabilities) in the form of the costs required to meet its obligations under the contracts to the ends of their six-year terms.

(Naturally, Passive clients are still likely to want to exert their rights to use the company's services to acquire five properties over the 6 year contract term because - even in a falling market - you could always make a good profit by purchase and resale since the company says that they have a special ability to acquire properties for a substantial undervalue of between 20% and 25%.)

It appears that these liabilities are not shown in the company's accounts. Moreover, it appears that they are substantial, because the company's website says that the advance fee covers only "some" of them, as follows:

"This is the fee that covers the 6 year management and construction of your portfolio. This fee is currently £37,500. The fee covers some of our costs in building a portfolio of 5 small properties (namely 1 and 2 bedroom flats) over a 6 year period."

Presumably, then, if these liabilities were shown in the company's accounts, the effect would be substantial. Of course, the company would have made sure that the bank offering the new loan and the auditors for the share repurchase were fully aware of them.

9. Steve Howson says, "I am not prepared to enter into any kind of protracted correspondence about private company matters" and "we take our financial and legal obligations very seriously indeed".

Fair enough, except that BOW's main question was whose shares the loan of "of up to £342,962.50" had been used to buy. At the moment, this does indeed remain a "private company matter" because the company is committing a criminal offence by still not having submitted its Annual Return, which is now five months overdue and which would have answered this question. Directors can be fined up to £5,000 for late submission.

Because the company has not provided the information either to BOW or to Companies House, readers may be left wondering about the possibility that the new bank loan which the company took out was then used at least partially to fund the loan "of up to £342,962.50" to the new company Aberon to purchase shares owned personally by Andy Shaw and Greg Ballard at a price which looks rather high.

If so, then some of this money could have gone straight into their pockets.

9. Response from Passive Investments 25th November 2008 to BOW Conclusions

Dear Ms. Owen,

In response to your 'Conclusions on Passive correspondence' I would like to comment further on three matters:

Firstly, we feel rather ambushed by your latest letter having only received your fax on Friday morning and being expected to respond by 6pm the same day or you will publish regardless. If I had been out of the office we would have been unable to respond within your imposed deadline and that would have been regrettable. We cannot understand why you would want to put such a short deadline on our response and why you could not give us a reasonable amount of time to respond is a mystery.

There are two specific points that I wish to comment upon before bringing this matter to a close.

In point '7' you raise the issue of valuations and seem to imply that our valuations are not independent. May I state quite emphatically that every single property valuation is undertaken by a professional surveyor who is approved by the lender and appears on the lender's approved list; Passive Investments does not employ or pay the surveyor. It is totally independent and the surveyors are the people who value the properties for mortgage purposes. Your somewhat suggestive statement regarding the properties (sic) capital and rental valuations suggest that you have a poor understanding of the property and mortgage markets and therefore perhaps you are not in a position to be questing (sic) our methodologies.

As regards point '9' - you seem determined to give everyone the impression that in some way what we are doing is underhand and you clearly believe the worst. I will reiterate once again that we do run our business affairs property, and take legal and financial advice from respected professional experts under whose guidance we comply with all obligations. Has it occurred to you that we may just be going about business properly and that we may not be answering all of your questions because they relate to private business matters and we may not want everything we do broadcast to the world?

Once again, I invite any of your readers to contact me directly if they would like information about Passive Investments and our investment strategy.

Yours sincerely,
Steve Howson
Head of Client Services
Passive Investments

Editorial Note:

Points to note are as follows:

1. In fact BOW's letter to Passive did not ask for a full reply by 6pm of the same day "or you will publish regardless". In view of Passive's last letter implying that they did not want to enter into any further correspondence, BOW's letter asked them to advise by 6pm of the same day whether or not they wished to reply and it stated that, if so, and if they would like more time to do so, the Conclusions contained in paragraph 8 above would not be published until their reply was received.

2. Valuation is not an exact science, and obviously it's going to depend on the instructions given to the valuer by whoever it is is who has ordered the valuation. In the case of a mortgage valuation, the valuation has of course been ordered by the lender. In recent years it has become clear that some lenders have been prepared to go to unusual lengths to increase their sales, taking on extra risks in the process. In some cases, these risks have now come home to roost. For example, Lord Higgins said in The Lords on 6th October 2008, " ... Northern Rock ... was in trouble because it gave excessive valuations ..."

No doubt Passive Investments "directed" its clients towards a prudent lender rather than a risk-taker, but the example of Northern Rock serves to graphically illustrate the crucial point is that a mortgage valuation is done for the lender - it is not done for the borrower.

Because the valuation is done for the lender, that means that the borrower can't rely on it. Indeed, the website of the Royal Society of Chartered Surveyors makes this point, too. They say:

"It is designed primarily for the lender to advise them of the existence, condition and suitability of that property for mortgage purposes. It should never be relied upon by a purchaser as a statement of the condition, since it is not a survey and not designed for the benefit of the applicant (purchaser)." :

Also, the Consumers Association and the Council of Mortgage Lenders both recommend that house buyers get a survey done.

With the Passive scheme, the valuation of the property is crucial because the scheme hinges on properties being acquired at a substantial undervalue of between 20% and 25%. There is no indication that any personnel of Passive Investments are qualified surveyors or valuers.

Since it appears that Passive clients are not advised of the need to even go and visit their properties, it would appear that these clients are taking an unnecessary risk if they do not commission an independent survey and valuation report - for example to ensure that the property does not have any structural problems whose rectification could eat into the crucial 20% - 25% claimed undervalue on acquisition.

3. Passive's assertion that "you seem determined to give everyone the impression that in some way what we are doing is underhand and you clearly believe the worst" is unfair. BOW reports on facts. In the course of BOW's research into Passive Investments, some unusual facts came to light, including the one-year write-off in the accounts of the six-year advance fees and the financial assistance for share purchase. BOW asked the company for explanations, but whilst they gave assurances of their probity etc. they did not give any direct answers to the questions.

Moreover, Passive persists in claiming that "we may not be answering all of your questions because they relate to private business matters and we may not want everything we do broadcast to the world" when the key question BOW wanted to know was whose shares had been repurchased. This is information which is required by law to be "broadcast to the world" by submission to Companies House where it is available for public access. Passive's Annual Return has still not been submitted to Companies House and is now more than five months' overdue.

In response to the question "What happens if I do not submit accounts or annual returns to Companies House?" on the website of Companies House at www.companieshouse.gov.uk, the answer is as follows:

"As a director of a company Companies House can prosecute for not submitting these documents on time. This is a criminial offence and upon conviction the court can fine a director up to £5,000 for each offence."

10. Correction re Maria Davies of Ladders of Success dated 16th January 2009

Maria Davies of Ladders of Success at www.laddersofsuccess.com and www.womeninpropertyinvestment.com has contacted BOW to ask for a correction as follows:

"I should point out that the only “gushing review” I ever wrote was for Andy’s book, NOT their portfolio build service, and when I bought into it myself it was £24,000 not almost £40,000."

It is the case, however, that Andy Shaw's book was a marketing tool for the Passive Investments portfolio build service, as Maria herself recently said:

"I still think Andy's book is good for motivating people but he does take about 350 pages to say what I say in one section of mine, and I removed it because it is basically a tool to hook people into his membership site and then onto Passive Open Days".

People like Maria Davies who marketed the book were, according to Andy Shaw's website at www.propertyinvestmentsecrets.co.uk, also in line to receive "Serious Commissions" on people they introduced into the Passive Investments "profit funnel":

"... Just one easy book sale can end up making you as much as £1,598.70 (it will soon be more, see below) commissions in time - combining front end, ongoing recurring and backend earnings ...

... Excellent FREE info easily converts the subscribers you refer happily into our profit funnel (for higher conversions and bigger commissions to you) ...

... On the initial book sale you'll earn 50% commission (raised from 25% which in itself provided huge commissions for initial partners because conversions were so high and sales were so easy) ...

... Then the membership site pays £10/mth commission for the life of the membership and if the client goes on to take up my main company's service then there is a 5% commission payable on a £35,000 product.

... A JV partner of mine, Nicola, made over £60,000 just by recommending our service to her list - I can't promise the same results for you, but I can promise you, this is an opportunity for a huge return on your investment ..."

It's also the case that Passive Investments is still listed on her website page headed "Book Maria To Present" as a client for her business as a speaker at property investment events, together with a testimonial from Andy Shaw and Greg Ballard of Passive Investments as follows:

"Maria spoke to a sold out audience and the level of interest which was created through her presentation helped to make this our best exhibition. Not only that, but the organisers confirmed that Maria's presentation was the best by far, out of around fifty, and they are pleased to offer us three presentation slots at the next exhibition. This will raise our company profile no end and has directly brought us new business."
Greg Ballard & Andy Shaw
Passive Investments

Until August 2007, too, the Passive Open Days were listed on Maria's blog on her website www.laddersofsuccess.com under "Recommended" with a link which looks like an affiliate (commission-bearing) link.

Also, on Maria's website at www.womeninpropertyinvestment.com Passive Investments was listed on the "Essential Resources" page with an asterisk to indicate "Those I can personally and unreservedly recommend to you, having had direct experience of them". In addition, there was a picture of herself with Andy Shaw at the top of the Photo Gallery page on this website, and Maria's review of Andy Shaw's book also appeared on this site with a link which again looks like a commission link to download the first five chapters for free - presumably a link to the "Serious Commissions" of "as much as £1,598.70" per sale, described above.

Passive Investments then disappeared from the womaninpropertyinvestment.com website, which currently promotes Caribbean 5 Star Investments (www.caribbean5starinvestments.com). This is Maria's company, and her co-directors are Mike and Kim Withey and Dr. Rohan Weerasinghe. Maria speaks at seminars to promote the services of this company. Andy Shaw's book was replaced by her own book "The Advantages of Real Estate by Maria Davies (and other leading real estate experts)".

Maria has told BOW that she is no longer working with Passive Investments nor recommending them.

11. Latest developments per the Singing Pig forum 19.11.09

http://www.singingpig.co.uk/forums/4/843553/ShowThread.aspx

12. Latest developments per Guardian article

Dear Marian

Did you see the article in Monday's Observer by Grahm Norwood?

http://www.guardian.co.uk/money/2009/dec/07/buy-to-let-investors-fret

By my calculations Passive need to account for some £10 million of client money???

Regards
Matt

Dear Matt,

Thanks, I hadn't seen the Guardian article.

I am surprised that the liquidation the company is about to enter is a voluntary one. I think that there are a number of issues of concern here - the viability of the scheme at the outset (although business expert Gill Fielding and property expert Maria Davies clearly disagreed with my analysis and conclusions because they thought it was great), the financial assistance for share purchase which I commented on in an update to my review, the unusual accounting treatment of recognising in the year of receipt the whole of the fees paid for six years' services (although, again, James Harmey of ALB Audit Ltd presumably found no fault with this in connection with the financial assistance for the share purchase), the sales activities that took place at Passive recently when it was already set for liquidation (as stated in the Guardian article), and the arrangements with the new companies.

If you are an investor (or you are in contact with other people who are investors), then in view of the amount of money which investors have lost I would recommend that you (or they) contact Companies Investigation branch to ensure that they are aware of what went on in the past and what is going on now with Passive. Companies Investigation Branch have wide powers to investigate companies' affairs and they are very good at their job, so they will be able to decide whether or not Passive Investments is a company they should look into. They can also look into the conduct of directors. The link for Companies Investigation branch is:

http://www.insolvency.gov.uk/cib/complain.htm

Kind regards
Marian

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12. Passive Investments Liquidation 11th December 2009

Documents filed at Companies House show that Passive Investments had an estimated deficit of £8.6 million when it went into voluntary liquidation on 11th December.

Notable debtors are as follows:

Aberon Ltd is shown as owing £45,000, and the liquidator estimates that this debt is worth nil. Aberon was the company which received financial assistance from Passive Investments Ltd to purchase shares in Passive Investments Ltd in February 2008, on the basis of a valuation which put the total value of Passive Investments Ltd at a figure substantially in excess of £1.5 million. An obvious question is whether this valuation took proper account of the liabilities of Passive Investments Ltd to fulfill its 6 year portfolio contracts, a question which BOW previously put to the company and which was brushed off - see link.

ASGB Partnership is shown as owing £400,000. AS and GB are the initials of Andy Shaw and Greg Ballard. The liquidator estimates that this debt is worth nil.

Notable creditors are as follows:

VAT £250,000

PAYE and National Insurance £30,000

Redundancy Payments Office £35,000

Barclays Bank plc (deficit on assets subject to fixed charge) £56,000. See above. This would have been monies advanced by Barclays on the security of the debenture of November 2007, which was three months before Passive Investments Ltd gave financial assistance to Aberon Ltd for the purchase of shares in Passive.

PD Internet Futures and Profix Maximisation Ltd, companies owned and run by Phil Doolan, are owed a total of £283,855. It seems that this has not changed Phil Doolan's testimonial headed "I totally trust Andy with everything", because it still appears on Andy Shaw's websites at www.propertyinvestmentsecrets.co.uk and www.property-investment-secrets.co.uk - although it does appear that these websites are in need of updating because they still also contain the following testimonials:

Gill Fielding: "Andy is an extremely powerful and impressive thinker, doer, and facilitator of success for others"

Maria Davies: "Like all great philosophers, Andy’s ideas are ahead of their time and often contrary to the “mob mentality”, but analysed to the nth degree with every angle considered from a long-term viewpoint. Second is his obvious desire to help others break out from the mundane. Through this desire, his ability to inspire and his revolutionary ideas, I believe he will leave a positive legacy for generations to come."

Judith Morgan: "If you are serious about becoming wealthy yourself then you MUST become an Andy Shaw Insider."

Nicola Carincross: "The clarity of thinking Andy bring to the table is nothing short of brilliant. I would do anything for Andy, and anyone that he holds dear. Ignore him at your peril as your financial and personal life will be very different if you move into Andy's orbit."

Greg Ballard: "His insight into making money is incredible".

As stated above - link to earlier Phil Doolan information - Phil Doolan was appointed a director of Passive Investments in August 2007 and he resigned in February 2008, a few weeks before the company gave financial assistance for the purchase of its shares.

Portfolio agreement claims £7.9 million. This presumably represents the liability of Passive Investments to continue supplying the services that it contracted to supply for six years when it took the advance fees from its clients. As discussed above - link - and as BOW queried with Passive Investments Ltd, the big question is why this liability was not shown in the company's accounts.

___________________________________

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