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Dutch financial watchdog AFM is to investigate the sale of shares by UK Internet investment company Uc Group, which has left some 650 Dutch investors facing losses of at least €100 million, the Financieele Dagblad reports.

Uc Group, located in Bromley (Kent), says it seeks to create "a fully integrated Global E-Commerce & E-Services company focused on business-to-anyone internet infrastructure", by taking minority stakes in small Internet companies. One of these companies is vanderbloem.com, which has established a direct link between Dutch and US cut-flower growers and flower retail businesses in the USA and Canada.

Because of its relationship with Vanderbloem, Uc.com started selling shares through the Dutch company Amstelvision during the Internet boom years. But according to FD this agent had no license to sell shares to individual (non-professional) investors, at least not until July 2000, when millions of shares had already passed hands.

Even after the license had expired, Amstelvision continued selling Uc.com shares, while presenting customers with a largely unaudited balance sheet.

Former UC director and shareholder Alan Dacre, who last week appeared on Dutch television (interview, partly in English, here:), says the sale of shares was a "criminal act by the people who commissioned it", as Uc.com was a private company, and not a public limited company.

Acre also questions the company’s financial health. Of the 19 companies Uc.com once had under management, there is "almost nothing is left", while investments were diverted to a private company in Switzerland owned by Uc.com CEO Kobus Paulsen, Acre claims. Liechtenstein company Bautechinvest Establishment (BTE) invested more than $276 million in Uc.com
without due diligence, he says. The contract says that at least $100 million are for ‘balance sheet purposes only’.

Paulsen denies any wrongdoing, FD reports. In a statement to its shareholders last week the company says that 2003 has been a "watershed year for UC Group, during which we have made considerable progress". However, financial particulars were not given. ®

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