Small Talk: Langbar founder is interviewed as part of investigation into hedge fund collapse

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A founder director of Langbar International, the AIM-listed cash shell at the centre of a fraud investigation, has been interviewed by Italian prosecutors who are looking into the collapse of a Canadian hedge fund.

Jean-Pierre Regli has been a director of Langbar since its 2003 float and lives in Lugano. In the company's prospectus, he is described as a Swiss and Italian citizen with 18 years' experience in the securities industry, asset management and private banking. He started his career with Merrill Lynch and has been on the board of several Swiss banks.

Mr Regli was interviewed by a Milan prosecutor in September about Portus Alternative Asset Management, which at one point held more than $750m on behalf of 26,000 investors. The Swiss banker, who is still a director of Langbar, has been co-operating with Italian authorities looking into how missing money from Portus has ended up in local bank accounts.

The Toronto-based hedge fund management company is accused of illegally diverting more than $87m in commissions, referral fees and other expenses. These commissions and fees were found to be so high that it would have been impossible for its clients to make a positive return. Mr Regli's lawyers have not returned Small Talk's calls over the past few weeks to discuss his meeting with the Italian authorities.

Portus was founded three years ago by Boaz Manor and Michael Mendelson, and quickly became one of the fastest growing hedge fund managers in the country. But in February this year things started to fall apart as the Canadian regulator prohibited the hedge fund from trading securities and, soon after, KPMG was appointed as receiver to the asset manager. A criminal probe is now being conducted by Canadian police.

KPMG has found it difficult to figure out where all the investor money has gone. It has not been helped by a lack of access to Mr Manor, who now lives in Israel and has said through his lawyers that he is too ill to co-operate.

Separately, in London, the Serious Fraud Office continues to investigate a possible fraud at Langbar, once AIM's biggest cash shell, after a search by forensic accountants from Kroll Associates failed to find the whereabouts of the company's £365m cash pile.

Gladstone in the bag

Things seem to be hotting up at Gladstone, the software provider to the leisure sector. Last week it emerged that Constellation Software, a Canadian software house, had taken a 5.8 per cent stake in the group. Constellation is without doubt an acquisitive outfit - it has completed some 30 deals in the past 10 years.

Meanwhile, KBC Peel Hunt circulated a research note highlighting just how profitable the group is likely to be. By the end of the current financial year, it expects Gladstone to have notched up a pre-tax profit of £800,000, rising to £1.1m in 2007. This leaves the group trading at just 11 times forecast earnings for next year, which is not a demanding rating for a fast-growing software company. Gladstone could well prove to be a top performer in 2006.

Waiting goes on at Lupus

Late on Friday, Lupus Capital shares ticked higher, sparking hope the group might soon be in a position to unveil a long-awaited acquisition. But investors should not hold their breath.

It has been nearly two years since Greg Hutchings took over at Lupus, promising to repeat the success he had turning Tomkins from minnow to billion-pound enterprise, and he is yet to complete his first deal. There were suggestions that he came within a whisker of buying a major waste management business in April, only to be out-bid in the final stages of an auction by a private-equity firm. Lupus shareholders must now be losing patience waiting for Mr Hutchings and hoping 2006 is a year of action at the £25m company.

String of awards fuels interest in CMR

CMR Fuel Cells, which claims to have developed a revolutionary type of fuel cell technology, will debut on AIM this week. Investec Securities, the group's broker, has had little trouble raising money for the company. In fact, it was forced to increase the size of the fund raising from £8m to £10-12m because of investor demand. This will value the company at about £35m.

CMR, founded by Michael Priestnall and Michael Evans, has developed a fuel cell which converts methanol into electricity. To start with, the group plans to target the consumer electronics markets where existing batteries are struggling to produce the performance increasingly required by users of mobile phones and laptops. CMR says its fuel cells can produce more power than anything currently available of that size.

The group has picked up an impressive array of awards over the past year. These have included the 2005 Carbon Trust Overall Innovator of the Year award and the Carbon Trust Small Business award. It was also named by Harvard Business School as one of the 25 companies most likely to change the world by 2010. CMR is definitely one for investors to keep an eye on in the months after its float.