Investigation uncovers massive whisky barrel investment scam
While there are legitimate traders in the whisky market, the lack of proper regulation has created a fertile ground for fraud.
Photo: Unsplash/Dylan de Jonge
702's Bongani Bingwa interviews Adam Gilchrist about this and other trending world news.
Listen below (skip to 03:00):
Victims have lost millions of pounds in a fraudulent whisky barrel investment scheme, a BBC investigation has uncovered.
Hundreds of unsuspecting investors were misled into sinking their life savings and pensions into overpriced casks, some of which didn’t exist.
How it works:
The scheme typically entices investors to buy a cask of whisky at the time of production, with the expectation that its value will increase as it ages.
To become Scotch whisky, the spirit must remain in the cask for at least three years, and many investors are encouraged to hold onto their barrels for 10 years or more in hopes of maximising returns.
The BBC has revealed that law enforcement is now investigating three Scotch whisky companies for alleged fraudulent activities, with the total value of investments affected running into the millions.
"If you're waiting 10 years or so in order to sell it on, then that's quite a long time for the fraudsters to have evaporated as it were."
- Adam Gilchrist
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