$10million Funding for ASX Listed Exploration Company
- On the 18th October 2016, GBM Resources Limited (GBM) a mining and exploration company listed on the ASX, announced they had secured $10million in debt financing with UK group National Federal Capital Limited.
- The terms as announced appeared favourable for GBM, the funding was to be advanced in two tranches to meet the requirements of GBM's work program; and
- a month later the parties agreed DD was complete, with an agreed 'tweak' to the timing of the tranches.
- In early Dec, GBM announced that $1.5m of Tranche 1 had been received, not quite the $3.5m as promised.
- Timetables were reset, some changes made to the expenditure budget to tie in with the new funding.
- On 4 Jan 2016 GBM announce that the balance of tranche 1 has not been received and by 16 Jan GBM announce that NFC is in breach of the loan agreement.
Review of www.nationalfed.com
- NFC has a nice dual language website (English and Mandarin) one that recently been updated in late 2016.
- Establised in 2002 as a subsidiary of Swedish Group HCB Trust, based in the West Country of England.
- While one of the nicer regions of the UK, it appears an unusual location for a financial services group particularly one with a Swedish parent who appears to be targeting the Chinese community.
- Perhaps the principal's of NFC are semi-retired, having swapped the hustle and bustle of the City's Square Mile (or the Nortic equivalent) for a life of tweed, landrovers, chasing foxes and shooting a few pheasants here and there.
- In their spare time they peddle structured funds through UK's Independant Financial Advisors sector.
- With a dozen or more highly performing funds across just about every sector you could imagine, and their own propriatory services such as the National Fed Portolio Architecture Service
Havent even scratched below the surface yet and its already this is on the nose.
A search of www.opencorporates.com (100m+ companies) comes back with Zero results.
UK Companies House
The following screenshot is from google search "National Federal Capital Ltd"
5 of the top 7 results are directly relavent to the NFC that appears to have entered into the $10m loan with GBM.
1. nationalfed.com website
2. ICIJ Offshore Leaks Database - node "294075"
3. ICIJ Offshore Leaks Database - node "185159"
5. HCB Financial Group - A new name related to NCF and perhaps related to HCB Trust?
7. National Federal Capital Ltd - British Virgin Islands. Possible confirmation of the true domicile of NFC.
- National Federal Capital limited was incorporated in the British Virgin Islands on 10 December 2002
- However the promoters represents that NFC operates in the UK.
- The following, as set out by Companies House in the UK are some of the requirements for foriegn entities to operate within the UK
HCB Trust Ek. for
Lets look at HCB Trust's website (www.hcbtrust.net)
The website is somewhat reminiscent of NFC's with the home page using a image slider promoting local urban images.
Somewhat perplexing is the statement that HCB Trust is a regionally-based Credit Union. The name HCB Trust doesn't exactly resonate a well branded name for a regional based Credit Union.
Somewhat more concering is that the NFC website proudly states that NFC is a subsidiary of "HCB Trust". Generally speaking, a credit union is a savings and loan co-operative - they take in deposits and make loans to its members. They dont have foriegn subsidiaries that distribute structured products.
A Swedish Credit Union?
On first pass, promoting a ‘credit union’ in Sweden as part of a ‘smoke and mirror’s investment group does make much sense. That is until you start to dig a little deeper. The following is an extract from a dodgy incorporator’s pitch on Swedish Credit Unions.
A Swedish Credit Union can take deposits and make loans to its members, and is exempted from license requirement if it has a maximum of 1000 members at any time. The claim that these members have to be named upfront is 100% false. You can register the CU with 3 directors who also act as founding members, and start marketing your services and accept members after it has been registered. You do not have to name your members or even report to any government authority when you accept new members. Only the board of directors are registered with the company registrar. This is the most attractive deposit taking entity available today.
This entity is registered in Sweden, a full European Union member and a highly respected jurisdiction.There is no annual license fee to pay, since the entity is exempted from license requirement.There are no qualification or paid up capital requirements since capital is derived from member contributions.
High tax levels. Sweden is obviously not a tax haven, and the association would have to pay 30% tax on any reported profit. One way around this is to use this entity together with a Panamanian licensed payment processing company, in order to accumulate profits in Panama rather than in Sweden.This company can also offer payment services like e-currency and credit/debit card services to the credit union members.
Note: Panamanian Corporation HCB Consultores Internationales, Inc was established in Dec 2003. It may be pure co-oincidence as other than the similar name, the timing and the reference above of utilising a panamanian company to minimise taxes in Sweden there are no ‘facts’ to connect the two.
- A sparkassa (Swedish credit union) has the legal form of a cooperative (ekonomisk förening). It cannot be incorporated as a Swedish limited liability company or joint-stock company.
- Economic Associations to operate as a traditional savings and loan institution with the capitalisation originating through member 'contributions.
- As long as there are less than 1,000 members there is no requirement for a banking license and reporting obligations are virtually nonexistent.
- Minimum of 3 directors are required with a majority required to reside within the European Union.
- Members can be of any nationality, you do not have to report to any government authority when you accept new members (however the Swedish banking authority has the right to request a register of members).
Thanks to www.Kompany.com its a breeze to do a search of Swedish incorporated companies.
Below is a snapshot of the EBR register for HCB Trust Ek. for
A bit more searching reveals 'the' complete address in Slovenia.
Akadema d.o.o is Acadamy LLC
Google translate provides further clarity (well sort of);
Technical Museum of Slovenia - Trzaska cesta 2, 1000 Ljubljana Solvenia
So the address provided is NOT the directors address of residence. Its not even a mail drop.
Its a completely bogus address altogether.
So the address is actually for a Museam and University (Acadamy!)
How dodgy are these guys?
Tržaška cesta 2, 1000 Ljubljana, Slovenia - Google Maps
Google maps zoom.....