Desperate investors awaiting payments from £50m ‘Bollywood Bond’

Desperate investors awaiting payments from £50m ‘Bollywood Bond’

DIY investors have been left waiting for thousands of pounds in late payments from a £50m retail bond still up for sale at Hargreaves Lansdown.

The annual interest was 6.5pc and they were guaranteed to get all their money back this year when Eros Media World, the Bollywood production company, issued a £50m retail bond on the London Stock Exchange nine years ago, lured by savers.

Adem Demir, who spoke under a pseudonym, invested thousands of pounds from his pension into the Eros bond. “Eros is a very prominent film producer in India and is an established business. I know there are risks with retail bonds, but this is such a well-known company that I had no reason not to trust them,” he said.

But Mr Demir was left thousands of pounds out of pocket, after the company failed to deliver a payment due in October. It should have received an 8.5pc interest payment, after restructuring triggered a bond rate rise in 2021. A higher yield usually indicates a higher risk of default.

Eros blamed the delay on “administrative issues” following an internal disconnect. It promised in November to resolve the issue as soon as possible – but months later, bondholders waiting for their money have been met with silence from the company.

“I would never have bought it if I hadn’t seen it on Hargreaves Lansdown,” said Mr Demir. “It’s worrying that it’s still listed there. I worry that disgruntled investors will see its high yield and buy it without thinking about the increasingly high risk of default.” The bond was still available for trading through rival broker Interactive Investor.

Retail bonds, unlike deposits with banks, are not covered by the Financial Services Compensation Scheme. This means that if the issuer goes bust, bondholders are likely to lose their money.

Unlike “miniature bonds”, retail bonds can be traded on the exchange. The Eros bond is now trading at around £9, down from its £100 listing.

The Financial Conduct Authority declined to comment, but is understood to be aware of the issue.
Eros Media did not respond to a request for comment. Hargreaves Lansdown declined to comment.

A spokesperson for Interactive Investor said the bond was considered a “complex product” and therefore investors were asked to test to confirm their suitability before trading.

The platform said that while there is no trading block as a result of failure to pay interest or dividend, it contacted the company but received no further information.

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