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| Six arrested in £420m fraud case | Six arrested in £420m fraud case |
| (3 days later) | |
| Spanish police have arrested six people on suspicion of perpetrating a £420m ($600m) fraud relating to a London-listed company, it has been confirmed. | Spanish police have arrested six people on suspicion of perpetrating a £420m ($600m) fraud relating to a London-listed company, it has been confirmed. |
| The arrests relate to the fraud committed at an AIM-listed company called Langbar between 2003 and 2005, Spanish authorities told the BBC. | The arrests relate to the fraud committed at an AIM-listed company called Langbar between 2003 and 2005, Spanish authorities told the BBC. |
| The founding directors of the company made false claims about its assets to increase the company's share price. | The founding directors of the company made false claims about its assets to increase the company's share price. |
| Reports suggest that the main suspect involved is among those arrested. | Reports suggest that the main suspect involved is among those arrested. |
| The six arrests were made on 21 January in Madrid, Barcelona and the town of Elche in the southeast of Spain. | The six arrests were made on 21 January in Madrid, Barcelona and the town of Elche in the southeast of Spain. |
| The Serious Fraud Office (SFO) began an investigation into Langbar in 2005. | The Serious Fraud Office (SFO) began an investigation into Langbar in 2005. |
| It confirmed that the "six people arrested and interviewed were male with ages between 56 to 76 years. They were Spanish nationals except one, an Argentine national." | It confirmed that the "six people arrested and interviewed were male with ages between 56 to 76 years. They were Spanish nationals except one, an Argentine national." |
| The arrested managed to make the value of the shares increase, without deposits to back it up, and profited from the subsequent sale of the shares Spanish national police | The arrested managed to make the value of the shares increase, without deposits to back it up, and profited from the subsequent sale of the shares Spanish national police |
| The arrests were the result of a combined operation including the SFO, the City of London Police, the Spanish national police and the Economic Crime and Money Laundering Group of Barcelona. | The arrests were the result of a combined operation including the SFO, the City of London Police, the Spanish national police and the Economic Crime and Money Laundering Group of Barcelona. |
| False advertising | False advertising |
| According to the BBC's Danny Wood in Madrid: "The suspects are accused of using false advertising to boost the value of Langbar shares without making any deposits. | According to the BBC's Danny Wood in Madrid: "The suspects are accused of using false advertising to boost the value of Langbar shares without making any deposits. |
| "Langbar entered the London share market with a value of $300m. Police say the suspects created enough public interest in the company to fraudulently resell shares to a value of $600m." | "Langbar entered the London share market with a value of $300m. Police say the suspects created enough public interest in the company to fraudulently resell shares to a value of $600m." |
| He added that the police said they had searched six premises where they confiscated computers and documents. | He added that the police said they had searched six premises where they confiscated computers and documents. |
| "Through complex commercial and stock market operations, as well as falsifications, the arrested managed to make the value of the shares increase, without deposits to back it up, and profited from the subsequent sale of the shares," said a statement from the Spanish police. | "Through complex commercial and stock market operations, as well as falsifications, the arrested managed to make the value of the shares increase, without deposits to back it up, and profited from the subsequent sale of the shares," said a statement from the Spanish police. |
| I think that we will get a substantial portion of our money back Nigel Smith, Langbar Action Group | I think that we will get a substantial portion of our money back Nigel Smith, Langbar Action Group |
| Shareholder losses | Shareholder losses |
| Nigel Smith, from an action group which represents some Langbar shareholders, said he was "pleasantly surprised" at the news of the arrests. | |
| "We are closer to getting some money back thanks to the sterling work of David Buchler, the present chairman of the company, who has managed to recover over £30m so far. | "We are closer to getting some money back thanks to the sterling work of David Buchler, the present chairman of the company, who has managed to recover over £30m so far. |
| "I think that we will get a substantial portion of our money back." | "I think that we will get a substantial portion of our money back." |
| He said that both private and institutional investors lost money in the fraud. | He said that both private and institutional investors lost money in the fraud. |
| He added that Langbar's nominated adviser was fined £250,000 by the stock exchange for failing in its duties to spot the fraudulent activities of the company. | He added that Langbar's nominated adviser was fined £250,000 by the stock exchange for failing in its duties to spot the fraudulent activities of the company. |
| Holding company | Holding company |
| Langbar was first listed as a holding company on the Alternative Investment Market of the London Stock Exchange in 2003, under the name of Crown Corporation Limited. It changed its name to Langbar International Limited in 2005. | Langbar was first listed as a holding company on the Alternative Investment Market of the London Stock Exchange in 2003, under the name of Crown Corporation Limited. It changed its name to Langbar International Limited in 2005. |
| In July 2005, the company announced deposits of £370m with ABN Amro and Banco do Brasil, which prompted investors to pile in, sending the share price up. | In July 2005, the company announced deposits of £370m with ABN Amro and Banco do Brasil, which prompted investors to pile in, sending the share price up. |
| Former directors are then alleged to have sold their shares at a substantial profit. | Former directors are then alleged to have sold their shares at a substantial profit. |
| On 12 October 2005, shares in Langbar were suspended and the company said it could not establish the existence of, nor verify its entitlement to, these bank deposits. | On 12 October 2005, shares in Langbar were suspended and the company said it could not establish the existence of, nor verify its entitlement to, these bank deposits. |
| In 2006, the new bosses at Langbar began High Court proceedings to try to recover the millions owed to investors. | In 2006, the new bosses at Langbar began High Court proceedings to try to recover the millions owed to investors. |