The promises made by an investment company called Whisky Scotland were spectacular. “Our investors see an average tax-free return of 20% per annum,” read its website, which offered “proven exits” for clients, including selling their whisky “through our own vast network of buyers”.

It continued: “According to the Knight Frank Wealth Report, rare whisky was the best performing collectable in a decade, experiencing an average annual 54% rise in value.”

The trouble is, that figure applies only to specific rare bottled whiskies and not the new-make cask whisky that this company was selling to small investors.

Now many of those investors are struggling to locate their casks after the company warned that it faced closing.

Whisky Scotland Limited director Paul Mooney admitted in an email to investors that the news would be “somewhat of a shock to the system”.

The company has a registered office in Glasgow but Mr Mooney, 44, lives in Essex, as does former co-director William Walsh, 43, who resigned in May. And despite its name, many of the casks it sold were actually Irish whiskey.

One investor, Janet Jones from Dukinfield, Greater Manchester, bought nine casks of Boann, from a new distillery north of Dublin, through the company. She says that she never received certificates of ownership for two of them, with acombined cost of £9,997.

She has certificates for the seven others that she bought for £19,200 but has no idea how to sell them if Whisky Scotland ceases trading. “I was left some money by my mum, not a lot but it was more than I was used to,” said Janet, 68.

“I was getting little interest from the bank and wanted to make it work harder. I don’t know anything about stocks and shares but liked the idea of investing in whisky, it seemed more fun than keeping the money in the bank.

“I bought the first seven casks in late 2021. In 2022 there was an opportunity to buy another barrel, Whisky Scotland said that it would be good to add to my portfolio.

“Last November I got another call, they said they had a buyer for my whisky but I needed one more barrel in an ex-bourbon cask to make up the pallet. I got a letter saying that I would see thepayment in March.

“I have phoned since but was always told that the directors were busy or away. Now the telephone number no longer works.”

Another investor is Oliver O’Callaghan-Brown from Chertsey, Surrey, who bought five casks, including two casks of new-make Boann maturing in ex-sherry butts that hold 500 litres, paying £14,495 for each.

“I cannot trace the casks, either to the distillery or to the bonded warehouse where they theoretically reside,” he said.

Mike and Norye Handley from Huntingdon, Cambs, paid £8,995 in January 2021 for two casks of new-make Lingdarroch made by the Bladnoch distillery in Dumfries, and they too do not know where their casks are now.

“We have many outstanding queries but without any communication from the company they are impossible to resolve,” said Mr Handley.

Independent whisky consultant Mark Littler warned that investors would struggle to make a profit on their Boann casks even if they can be located. “For whisky to be valuable it needs either to be from a historic, premium distillery or a premium age, and a three-year-old whisky from a new distillery like Boann is neither,” he said.

Whisky Scotland did not reply to multiple invitations to comment. In an email to some investors in June, Mr Mooney said that the company faced shutting down. This was sent to people who invested in bonds sold by the company – in effect, lending the business money.

“We have taken the internal decision to offer an early redemption scheme for a percentage of our client base,” the email read. “It is with regret that this opportunitycannot be offered to everyone quite simply because there is not sufficient cash reserves to facilitate it.”

The email added: “Kindly note that failure to redeem your original investment amount ahead of our liquidation will result in the complete loss of funds.”

Last month the FCA warned that Whisky Scotland bondholders were being targeted by so-called “recovery rooms” scams, saying they “should remain vigilant if unauthorised firms contact them offering to help get back investments for a fee”.

The accounts that Whisky Scotland should have filed to Companies House by February 29 this year are overdue. This is just the latest scandal to hit the whisky investment trade and highlights a significant problem for inexpert investors – the lack of publicly available cask whisky prices.

Back to Mr Littler: “I’ve had clients come to me after paying hundreds of thousands of pounds more than they should have for a cask of whisky, with the company they used to buy it no longer picking up the phone.

“It’s impossible to do any independent research into pricing, this leaves the public so vulnerable.” A stark example of this was recently revealed by Which? Money magazine, which told of a small investor who bought a cask of rare Ardbeg in 1994 for £1,000 and was delighted when a brokerage bought it from him two years ago for £30,000 – until he learnt that another 1994 Ardbeg fetched £205,000 at auction shortly afterwards.

In another scandal, 27-year-old Casey Alexander, from London, was sentenced to three years probation by a court in the United States in June for his part in a £10million whisky and wine investment fraud. Also in June, officers from the Cityof London Police searched the premises of whisky investment company Cask Whisky Limited.

No arrests were made and the investigation is ongoing.

Last year the Advertising Standards Authority became so concerned about widespread misleading profit claims by whisky investment firms that it issued an Enforcement Notice to 28 of them.

Fergus Ewing, SNP member of the Scottish Parliament, has raised what he called “the alarming growth in fraud in the sale of whisky casks. Many of those who were involved in the Australian wine index fraud back in 2000 where 8,700 people lost £87million have moved on to this whisky business,” he told the Scottish Parliament in April.

“The risk is that unless this is dealt with, and there’s a very serious scandal, this could seriously damage the reputation of Scottish whisky worldwide.”

Despite the promises of huge profits made by some investment companies, there are signs of market saturation, with Scottish whisky exports falling to £5.6billion in 2023, down from £6billion the previous year, according to the Scotch Whisky Association.

Last year also saw the smaller Irish whiskey market shrink, with exports down 14% to £737million, according to the government food agency, Bord Bia.

Whisky investment, like wine, is not regulated by the Financial Conduct Authority, so if things do turn sour, there’s no recourse to the Financial Services Compensation Scheme.

Whisky Scotland was contacted multiple times for a response by phone and email during the writing of this article. No response was given.