Pembrokeshire and Llandudno hotel investors 'fear losing life savings'
Six Welsh hotels - run by a man originally linked to plans for a resort in the Afan Valley - have gone into administration.
Hundreds of investors are unsure if they will get their money back after investing in the hotels, backed by Gavin Woodhouse's companies.
Some say they fear losing their homes or their life savings.
Solicitors representing Mr Woodhouse say he will make a statement once legal proceedings have ended.
Investors paid thousands of pounds for individual rooms in the hotels, on the understanding their investment would pay for refurbishment - but with the promise of an annual return of 10% and the chance to sell the room back at a profit after a decade.
Administrators Duff and Phelps were appointed in July as interim managers of a number of companies from which Mr Woodhouse was removed as director earlier this year.
These include Northern Powerhouse Developments Ltd (NPD), whose plans for a £200m adventure resort on 325 acres (131 hectares) of forestry land in the Afan Valley were given conditional planning approval by Neath Port Talbot councillors in March.
The council has given project backers - including NPD's former chairman of leisure Peter Moore - an extra six months to keep the project alive.
Mr Moore, the founder of Center Parcs in the UK, said he was "confident" the final resort would be "well worth the journey".
Councillors were told that a very different financial model would be used on the project this time.
A spokesperson for Neath Port Talbot council said: "Mr Woodhouse is no longer involved in the project, but the council is engaging in constructive dialogue with third parties."
Duff and Phelps have heard from 500 to 600 investors in the hotels so far but are appealing for others to come forward.
They estimate up to a thousand investors may be involved in the various investment schemes run by a group of Gavin Woodhouse companies, and that the investment value may run to between £70m and £80m.
The six hotels caught up in the investment scheme are:
- Fourcroft Hotel in Tenby, Pembrokeshire
- Fishguard Bay Hotel in Goodwick, Pembrokeshire
- Caer Rhun Hall in Conwy
- Queen's Hotel, Llandudno
- The Belmont, Llandudno
- Llandudno Bay Hotel
It is understood they are part of the Whispers Hotels Group - run by Gavin Woodhouse's Giant Hospitality Group, which is in administration.
The hotels are still trading and the administrators hope to sell them as going concerns.
One investor, Derrick Towlson, told BBC Wales he and his wife bought a room at the Fourcroft Hotel for £75,000.
He sold his villa and business in Spain to return to the UK to be closer to family.
They were told the investment would fund the renovation of the hotel, and that it would earn a 10% return on their investment - effectively an annual rent payment - plus two weeks' free use of the room per year.
After 10 years, the company pledged to buy back the room at a 25% profit.
"We'd been going to Tenby for 55 years as a family and we love the place," said Mr Towlson, from Llysfaen in Conwy.
"It's a beautiful place, a hotspot for tourism, so we thought the returns should be fairly safe.
"The [hotel] position is good, it's Grade II listed, and the investment is in bricks and mortar with deeds with the Land Registry… so all that combined gives you a good safe feeling."
Mr Towlson said he and his wife had stayed at the hotel since making the investment in February 2017, but could see the promised refurbishment was not progressing.
They had not received any payments on their investment when the administrators were called in and have now put their house up for sale.
"You feel stupid one minute, angry… when you look back now I think it's pure madness really, but it was so convincing," he said.
"I retired early but it looks like I might have to go back to work now."
- Extra time granted to save £200m resort project
- 'Full steam ahead' for adventure resort
- Adventure resort plans for forest site
Sarah Bell, managing director of Duff and Phelps, said administrators would be working to maximise funds for creditors - but also investigating where the investment money had gone and whether it could be recovered.
"It's early stages but at present we've had contact from 500 to 600 investors," she said.
"Our estimates believe there may be as many as a thousand investors into the various schemes covered by this group of companies, so it is a relatively complex investigation."
Aside from the adventure resort and hotels, another strand of the administrators' investigation is focusing on care home investment schemes run by Mr Woodhouse's companies.
Investors are understood to have purchased rooms in care homes on a similar basis to the hotel room investments.
But in some cases, the care homes had not been built.
At a creditors' meeting last week, investors in one care home scheme in Yorkshire, which never materialised, were asked if they would accept a settlement of 11p for every pound they put into it.
Ms Bell said the investment model used across all the schemes had "all the hallmarks of Ponzi scheme" - where profits are paid to early investors using funds from later investors.
She added: "These circumstances are extremely distressing for lots of investors… we've been in contact with people who have put their life savings into this investment, everything they own into this investment."
The Serious Fraud Office (SFO) has been contacted about the case by politicians including Plaid Cymru leader Adam Price and Labour MP John Mann.
It told BBC Wales: "We are aware of the allegations, but can neither confirm nor deny interest in the matter."
Backers for the Afan Valley adventure resort project promised 600 lodges, a 100-bed hotel and a range of adventure activities including a "survival zone" in the name of celebrity adventurer Bear Grylls.
Ms Bell said "very positive" discussions were being held with major stakeholders in the scheme, including local and Welsh Government, with a view to keeping the redevelopment plans alive.
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