Dean Roberts of 3tone claims he’s “secured a direct line of communication” with the UK’s Association Of Independent Music to discuss the future direction and focus of the dodgy distributor - and is now misrepresenting that call to further delay paying what he owes to artists, labels and former employees that he’s screwed over.
In an email shown to CMU, the 3tone boss uses the call with AIM to deflect demands for payment, and goes on to say that AIM COO Gee Davy will be able to give an “honest opinion on 3tone Music’s directional focus moving forward”.
When CMU contacted AIM to ask what that “honest opinion” might be, Davy said, “AIM has been horrified by the reports of the situation at 3tone. We are following up on a number of points provided by CMU in the interests of supporting members of the independent music community caught up in this situation”. She went on to say “the email reported here by CMU was not approved by AIM and should not be taken to suggest any type of endorsement”.
Sources external to AIM say that one option Dean Roberts is keen to pursue is that 3tone should be allowed to “trade its way out” of the current situation, and he is - yet again - hinting that a “new finance agreement” is just days away. Sources say he’s implied that this is the “only way” that anyone will get paid.
In September, when CMU began its investigation into 3tone, Roberts repeatedly promised customers - and told CMU - that money from investors was on the way “any day”, but that events outside his control were holding things up. One of those events was - he claimed - that the attacks perpetrated at the Supernova music festival, and Israel’s subsequent attacks on Gaza, had held up money from “Israeli investors”.
The email sent to 3tone customers most recently also says that the company’s “financial partners” have been subject to events that were “out of their control”.
Unusually for Roberts, this time, this might contain a grain of truth. However, that truth may be worse than the previous fictional “things are held up” excuses 3tone has made in the past.
As CMU previously revealed, 3tone’s “financial partner” is ‘private investment group’ Carlton James, and it was the “Carlton James Diversified Alpha Fund” that invested money into 3tone under “secured finance agreements”. In an all hands meeting with staff in March 2023, Roberts said that 3tone had received “£3.5 million” over a three year period from Carlton James. CMU has been shown documents that appear to show around £1 million in payments from Carlton James to 3tone between February 2019 and December 2022.
While those funds came via the “Carlton James Diversified Alpha Fund” what is much less clear is the origin of the money going through that fund.
Our original reporting highlighted the complex structure of companies in the UK, British Virgin Islands, Cayman Islands and other jurisdictions that Carlton James uses to operate. One of those companies is the “Navigator Global Fund Management Platform SPC” - or “Navigator Fund” - which was formerly called “Carlton James Mollitium Offshore Fund Manager Platform SPC”.
In March 2022, a major financial scandal erupted in the UK after funeral plan provider Safe Hands collapsed into administration, leaving more than 46,000 people who had pre-paid for funerals out of pocket.
Documents from the liquidators of Safe Hands Plans Limited filed with the UK companies regulator show that a substantial amount of money is missing. That money was cash people had handed over to Safe Hands to pre-pay their funeral expenses and was meant to be safely held in trust by Safe Hand Plans Trust.
However, more than £30 million of that money was diverted through various companies to the Carlton James-associated Navigator Fund via a company called TJM Partnership Limited, which has also entered into administration. TJM was fined £2 million by the Financial Conduct Authority for “serious financial control failings”.
The administrators of Safe Hands say, “TJM was recorded as managing investments of the Safe Hands Plans Trust totalling approx £46.34 million. TJM invested a large proportion of the fund from the trust with the Navigator Fund. The Navigator Fund contains a number of segregated portfolios, in which funds from the Safe Hands Plans Trust were invested. These segregated portfolios are understood to be high risk illiquid funds. It is currently unknown whether the trust is the sole investor in the Navigator Fund’s segregated portfolios, although this confirmation has been requested by the administrators”.
Those “segregated portfolios” forming the Navigator Fund, the administrators go on, “directly invested funds in entities connected with Safe Hands Plans”. It is this circular movement of money that raises a number of red flags. “The administrators continue to investigate the relationship between Safe Hands, the Trust and the Navigator Fund”.
The UK’s Serious Fraud Office launched an enquiry into the collapse of Safe Hands Funeral Plans in late 2023.
The timing of the collapse of both TJM and Safe Hands came just months before funds to 3tone apparently dried up.
In March 2023, Dean Roberts held an all hands company meeting and told staff “the last tranche of investment that we had was in August 2022. That’s when the press release went out about the fifty mil. From August to March 2023 - for a company that relies heavily on investment, there isn’t any. You start to see that the working capital starts to go into negative. For a business that’s not fully fledged running on its own income - what’s going to happen?”
The “press release about the fifty mil” that Dean Roberts references is information 3tone sent out to various media outlets claiming that it had raised “$50 million”. While some of those publications - including MBW - have now amended their articles, others have not.
He then went on to claim that he had concluded a deal for a further £5 million to be put into the company, saying, “We’ve had £3.5 million over three years”.
It’s clear from reports of this meeting that this apparent investment was coming from the same sources as previous funds. For those tranches of investment to have dried up just months after both TJM and Safe Hands collapsed - if the information contained in the administrators report for Safe Hands is accurate - is unsurprising.
As things stand today it seems highly unlikely or impossible that 3tone would be able to “trade its way out” of the current situation. The company hasn’t paid its few remaining staff for months, still owes tens of thousands to former staff, artists, labels and suppliers, has abandoned its offices, and High Court bailiffs are apparently unable to locate Dean Roberts to enforce debt orders.
Many of the people CMU has spoken to before and after we first broke the story have said that any attempt for 3tone to “trade its way out” of things would be unacceptable - and would require the support of key participants across the industry.
The only thing Dean Roberts should do, say many of those people, is apologise and beg forgiveness from the numerous artists and employees that he bullied, abused and screwed over - and that once he has done this, he should liquidate his company and use whatever money is left to pay his debts.
One former employee familiar with the current situation said that if 3tone was allowed to “trade its way out” then “all that would happen is they’d have more time to bury - or continue - what they are really doing, which includes defrauding artists and staff alike. I have no faith that they would honour their commitments to artists or settle any debts”.
Another former employee said that Dean Roberts has “managed to evade ACAS, my high court ruling and now my high court-assigned bailiffs, which in turn I will likely be charged for. I understand random pockets of money are being returned to clients, but I do fear that this is part of a larger ‘get back on track’ case. I’ve no doubt Dean’s main priority right now is to repair his image. I can’t see any reason as to why he’d keep the company going and it wouldn't surprise me if he’s attempting to twist the narrative to try and make himself a victim in all of this. He has old industry friends in strange places”.
Another former 3tone employee recently contacted CMU to say that, after raising an ACAS claim for unpaid salary, 3tone “totally ignored it”, before going on to say “turns out they had reported paying me up until October despite not having been paid since January, so when I finally got some new work, HMRC went hard on me. So now I’m having to deal with the fact that HMRC are telling me I owe them money on earnings I never received. It seems they reported my earnings but didn’t pay the employer contributions. It’s the long shadow of Dean ruining lives”.
This was confirmed by another former employee who said, “the heartless bastard has filed some kind of payslip/tax thing meaning one of the guys can’t receive Universal Credit. This will also have some pretty shitty tax implications on those of us working multiple jobs to get out of debt. Absolutely fuming about it”.
AIM’s response in full:
AIM has been horrified by the reports of the situation at 3tone. We are following up on a number of points provided by CMU in the interests of supporting members of the independent music community caught up in this situation and also to work with our distribution members on creating guidance and clarity on best practice for labels and artists. We feel enormous sympathy for anyone left in a bad position and have been assisting and supporting Yasin El Ashrafi and a few others who have come forward to AIM over the past several months. AIM remains available to provide best practice advice to suppliers if they require it. Anyone from the independent music community who is still seeking support can continue to contact AIM on [email protected].