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Forbes
19-05-2025
- Business
- Forbes
Dekanta's Links To Scotch Whisky Cask Investments Raise Ugly Questions
The Scotch whisky cask investment sector has seen its fair share of significant negative press recently, and not without reason. BBC investigative reporting and a story from the New York Times, among other coverage and warnings from industry figures, have illustrated how many firms advertising the healthy profits to be amassed from investing in Scotch whisky casks rely on using lies and misinformation to do business and lure new clients while also hiding or misrepresenting the truth about the financial risks involved. More recently, the collapse of UK-based Whisky Merchants Trading Ltd, a Scotch whisky cask investment company intertwined with a web of businesses around the world usually operating under the names of Braeburn Whisky or Cask 88, further casts doubt about whether the general public can safely invest in Scotch whisky casks at all. Though Whisky Merchants Trading Ltd is now 'in administration' - the U.K. version of Chapter 11 - almost all Braeburn Whisky and Cask 88 entities are currently still in operation, although many of them have laid off most staff and/or have severely reduced trading activities. At least several hundreds of investors burned by the collapse of significant components of this cask investment network have been frantically trying to find and take ownership of their casks that were under Braeburn Whisky/Cask 88/WMT control. This network of businesses involved in Scotch whisky cask investment was founded and controlled by British national Edward Davidson, while New Zealander Patrick Costello and Davidson's wife, Chinese national Ma Xianmei, are also often listed as shareholders or either hold or previously held director positions across the firms alongside a few other individuals. However, aside from cask investment, Davidson and Ma also each control half the shares of a Singapore-based Japanese whisky retailer, Dekanta Alcohol Trading International PTE Ltd. Ma is also a director of the company. Perhaps because of the issues at Braeburn/Cask 88/WMT, Dekanta – one of the largest mail order Japanese whisky retailers - has now come under increased scrutiny. Sources now suggest that Dekanta may not have been fully transparent in its communications about its co-founder, a number of its products, and its partnership with a new Japanese distillery. In an article published in Asian whisky website 88 Bamboo, Dr. Andrew Lui asks the question whether Ma, as a prominent face of the company, has been consistently presented publicly and to the wider whisky industry as a 'fictitious persona' - Makiyo Masa, a Japanese whisky expert with Japanese nationality. (In a 2016 Spirits Business article she includes herself in a reference to 'we Japanese' and a Dekanta press release from 2017 refers to her as a "Japanese entrepreneur.") Familial ties to Japanese whisky history have also been implied. However, Lui writes that the Dekanta director never has been interviewed by Japanese media nor has the company ever hosted a Japanese media event. He also points out how her use of basic Japanese phrases are 'painfully strained', and sound as if they are spoken and pronounced by a native Mandarin speaker. In an internal document I obtained written in 2022 by Davidson to a senior executive who worked across the Braeburn/Cask 88/WMT companies he confirms her Chinese name as her legal one but refers to her as 'Makiyo', describing her as 'part Chinese, Japanese and Vietnamese a beautiful blend that gives you a hangover sometimes lol'. Lui also refers to her personal Instagram page where she uses the display name 'Maki Torii', perhaps implying a connection to the Torii family that founded Yamazaki with the help of Japanese whisky pioneer Masataka Taketsuru (who, interestingly, was affectionately called 'Masa' by his Scottish wife, Rita Cowan). Furthermore, Lui also questions her status as a whisky 'expert' – asserting in the article that Ma memorized notes and scripts about the whiskies she was talking about and the wider whisky industry before every media event she attended. When I interviewed former employees involved in the Braeburn/Cask 88/WMT network of businesses - all of whom requested to remain anonymous to avoid legal repercussions or individual reputational harm within the industry - they confirmed this claim to me: 'They had a copywriter who would prepare all these scripts for Makiyo, so she could be wheeled out and presented as some sort of Japanese whisky expert", said one. Another emphasized that she while she was extremely familiar with Dekanta's products and their margins ("she had an excellent head for numbers" said the former employee), Ma frequently needed an extra hand, though this did include help with English: 'Maybe if you asked her about whisky regulations she'd need a bit of coaching…to be fair she needed her hand held for a lot of [interviews]. However, a lot of it also was to support her with the English language as that was a potential barrier to [consumer education].' Dekanta also has been criticized recently over its communications regarding the legacy of legendary Japanese distillery Karuizawa, which ceased production in 2000. Among aficionados and collectors Karuizawa's whisky is universally praised and highly sought, with bottles of its whisky fetching astronomic prices at auction. Recently, though, a new Karuizawa Distillery, built by a company called Karuizawa Whisky Co (not to be confused with the Komoro Distillery built by a different unrelated company, Karuizawa Distillers Inc.) began producing spirit, claiming in an official press release that 'after more than 20 years Japan's most legendary whisky distillery is back." A partner in the project, Dekanta is helping build the distillery's brand with the plan of eventually offering official distillery releases and independent bottlings. It also is selling casks of its spirit, proclaiming proudly on its website that 'after 22 years of silence, the world-renowned Karuizawa Whisky has made a triumphant return." However, as pointed out by a variety of experts and industry figures, these claims are simply untrue. 'The new distillery will be called Karuizawa, and its whisky will also be labelled as such," wrote whisky writer and author Dave Broom about the project when it was first announced in 2023. "Nothing has been resurrected, or revived, or reopened. But why let the truth get in the way of the story?' The new distillery's construction and production does involve former individual Karuizawa distillery staffers, with production features similar to the original distillery. However, it's certainly a wholly different facility, based in a different (though nearby) geographical location from the original Karuizawa and, obviously, will eventually produce a different whisky once it is bottled. Dekanta seems to have made both the new and old Karuizawa distilleries difficult to distinguish from each other on its website and promotional materials. At the time of writing, on one page a block of text briefly describing the original Karuizawa's history is immediately followed by another stating that 'as Karuizawa Whisky's exclusive global partner, we [Dekanta] are thrilled to present to you an extremely limited amount of casks available for private ownership.' Yet, the company doesn't explain that the second Karuizawa entity is a completely different project. Another page advertising sales of Japanese whisky casks also seems to make little effort to distinguish these two very different Karuizawas to prospective purchasers. As Broom explains: 'The issue isn't the opening of a new distillery in Karuizawa – after all Komoro is already up and running there. It lies in the name, and the easy way that this fact can be blurred so that people are led to believe that this is the old place reopening.' In a 2020 article in The Scotsman, Ma (as Makiyo Masa) claimed: 'We believe we have a duty to our clients to be as transparent as possible.' While in that interview she was specifically discussing the issue of the Japanese whisky industry blending Scotch whisky into their products, it might be fair to conclude that Dekanta and Ma haven't quite lived up to that wider promise of transparency when it comes to their work with Karuizawa. It's especially relevant as Ma's and Davidson's Scotch whisky cask investment firms appeared to also rely on misinformation and vague promises to attract investors, who have now been abandoned by these companies and are having to deal with the resulting mess themselves. Whoever purchases Japanese whisky casks from Dekanta must now hope a similar fate doesn't befall them.
The National
03-05-2025
- Business
- The National
Two Scotch whisky cask investment firms go bust with all jobs lost
The two Edinburgh-based whisky investment firms, Cask 88 and Braeburn Whisky, have folded, with all staff made redundant this week, Forbes has reported. According to reports, a Glasgow-based holding company with ties to the firms, Teaghglach Holdings PLC, has placed an 'active proposal to strike off' with Companies House, meaning that the legal process to dissolve the parent company has begun. Former employees, who have asked not to be identified for fear of endangering current or future employment, confirmed to Forbes that both sister firms had ceased operation on April 30. READ MORE: BrewDog records multi-million pound loss in major US market slump In a video back in March, Taylor Costa Van Putten, president of Braeburn USA, bragged that his company was 'the world's international whisky investment experts' and claimed the company had $80 million in assets. However, it has been reported that prospective investors who put their money in the companies are likely to lose it. It has been reported that multiple warehouses have confirmed that many anxious clients of the two firms have made desperate phone calls to find their casks, although it is unclear if they have been able to locate them. Cask 88 and Braeburn Whisky have been approached for comment.
Forbes
02-05-2025
- Business
- Forbes
$80 Million Scotch Whisky Cask Investment Firm Goes Bust
Scotch whisky casks in 1950. It remains to be seen whether the casks supposedly owned by Scotch ... More whisky investment firms Cask 88 and Braeburn Whisky actually exist. The world of Scotch whisky cask investment has always been high risk and also plagued by misinformation and riddled with fraudsters who had landed on whisky after running other types of commodities scams. Now, sister Scotch whisky cask investment firms Cask 88 and Braeburn Whisky have gone bust. Though neither company responded to a request for comment, multiple sources that worked with both companies, including former employees, confirmed that both have folded. Sources – some of whom asked not to be identified for fear of endangering current or future employment -- also confirmed that most, and possibly all staff were let go this week on April 3o as well. Teaghglach Holdings PLC, the Glasgow-based holding company with ties to the firms, has placed an "active proposal to strike off" with Companies House, the register for UK-based businesses – meaning that the legal process to dissolve the parent company has begun. However, another company associated with the firms, Whisky Merchants Trading Ltd, of Edinburgh, was still active at time of writing. In a video released in March, Taylor Costa Van Putten, president of Braeburn USA, bragged that Braeburn are "the world's international whisky investment experts' and claimed that the company has $80 million in assets. It now appears that the prospective investors who put their money and faith in the companies are likely to lose a lot of their money, with multiple warehouses confirming that many anxious clients of the two firms are making desperate phone calls to find their casks. And perhaps most tellingly, Cask 88's World Smallest Whisky Bar in Edinburgh, a former police information box located to the Johnnie Walker Princes Street whisky experience which was opened with great fanfare as a bar in 2022, has now been painted over. Casks of whisky in 1950. Many scotch whisky cask investment firms sell casks that don't exist, or ... More make prospective investors pay vastly inflated prices. The news emerges in the wake of multiple warnings from industry figures, including me. I'm the co-founder of Protect Your Cask, a website providing information and details about cask investment scams and responsible cask ownership. Recent investigations by The New York Times as well as the BBC about Scotch whisky cask investment scams have also increased scrutiny on the situation. The City of London Police are also currently investigating at least three suspected scammer firms, including Cask Whisky Ltd, Cask Spirits Global Ltd, and Whisky Scotland. Firms operating scams typically either sell imaginary casks or real casks at greatly inflated prices, sell the same cask to multiple buyers -- or a mix of these tactics. They start by using social media — and sometimes advertise in established publications – to cast a wide net, targeting victims ranging from curious investors to the elderly and financially vulnerable. They promise attractive, consistent returns and pitch so-called "multiple exit strategies" to make the investment seem low risk. To build credibility, they often refer to historical sales of rare whisky, even though the UK's Advertising Standards Authority has ruled many of these claims as misleading. Once investors agree to purchase a cask, they're typically handed a 'certificate of ownership.' But in reality, this document is often meaningless; it neither guarantees legal ownership nor proves the cask even exists. The most important principle in legitimate cask ownership is that the investor must have direct contact with the warehouse storing the cask, usually via a document called a Delivery Order. If that line of communication doesn't exist, it's a potential major red flag. The promise made to prospective investors by most Scotch whisky cask investment firms of 'multiple exit strategies', including from Braeburn Whisky, tend to fall apart under scrutiny. In many cases, as detailed by the BBC and also in cases I have seen, when a cask is allegedly resold — real or not — it's usually to another buyer found by the same investment firm, at an inflated price. Simply put, this kind of approach resembles a pyramid scheme rather than a legitimate investment practice. In a few rare cases, an investor might actually turn a profit, but only by offloading the cask to another buyer and offloading the risk at the same time. These occasional 'success stories' are then used to create the false impression that these firms are reputable and acting responsibly in the interests of its clients. As firms in this sector begin to collapse and investors wonder what's happened to their money and casks, it's clear that more disturbing headlines regarding Scotch whisky cask investment scams are likely to arrive -- and that in many cases, the 'water of life' can be repurposed as the choice liquid of scams.
