14-year director bans for £5.5m land banking and carbon credit scam
Three brothers, Barinua Carr Nwikpo, John Ekpobari Nwikpo and Daniel Nwikpo have been disqualified for 14 years each along with another man, Bradley Peter Ferry, for operating a land banking and carbon credit scam through Tullett Brown Ltd.
The Nwikpo brothers all signed undertakings not to act as company directors or be involved in the management of a company for 14 years each from 22 April. Bradley Peter Ferry had already given an undertaking, also for 14 years, from 24 October 2014.
All four men used pseudonyms as part of the scam, Barinua Nwikpo was known as Bari Carr; John Nwikpo as John Stone and Daniel Nwikpo as Daniel Fox and also Daniel Peters. Mr Ferry was known as Brad Baker.
Tullett Brown traded from offices in Houndsditch in the City and was involved in selling greenbelt land and carbon credits (Voluntary Emission Reductions or VERs), to members of the public for investment purposes. The business was the idea of Daniel Nwikpo who had worked at various land banking companies in the past.
After Tullett Brown was shut down by the Official Receiver in March 2012, the selling of the worthless carbon credits was continued under another of their companies, Foxstone Carr Ltd.
Mr Ferry was appointed as the sole director of Tullett Brown but was nothing more than a salesman who acted on the instructions of the Nwikpo brothers.
The company sold land at Cheadle near Manchester, Chailey in Sussex; Billericay in Essex; and Wraysbury in Surrey. The site in Cheadle was sold to investors on the hope that it would increase in value by being developed as part of the extension of the A555 Manchester Airport Link road. Tullett Brown bought this 2 acre piece of land for £36,000 in September 2009, divided in to 28 plots and sold them to unsuspecting victims for a total of £289,000. Stockport Council is now seeking to purchase the land for the building of the airport link road and have placed a value on the land of £30,000, which is even less than Tullett Brown paid for it.
Tullett Brown charged its victims as much as £24,000 for a plot of land worth £590.
The company received a total of £2,091,799 from 106 victims for land sales between June 2009 and July 2011. The same land was originally purchased by the company at a cost of £218,000. None of the land sold by Tullett Brown is suitable for investment and the local authorities have stated that they land cannot be developed upon.
After being visited by investigators for the Secretary of State in 2011, Tullett Brown stopped selling land and commenced selling carbon credits, and in particular VERs, for investment proposes. Between May 2011 and the company being shut down in March 2012, Tullett Brown sold 500,000 carbon credits to around 400 victims for a total of £3,242,491. The same carbon credits were purchased by Tullett Brown from its supplier, Eco-Synergies Ltd, for £600k. The investigation revealed that their supplier paid as little as 37p per carbon credit, with those same carbon credits then being sold by Tullett Brown to its victims for £6.90 per carbon credit.
Foxstone Carr sold 98,500 carbon credits between November 2011 and May 2012 for a total of £523,900 at an average of £6.67 per carbon credit, which were also supplied by Eco-Synergies Ltd.
The VERs were sold by Tullett Brown and Foxstone Carr as an investment on the basis that they will increase in value and be sold for a profit in the future, which they could not. Notwithstanding the mark-ups applied there is no genuine secondary market for VERs. As a result the victims are unlikely to be able sell their VERs and will lose their money.
Amongst the evidence uncovered by the investigator, Matthew Stone, were emails between the Nwikpo brothers in which they conspired to divide up the funds received by the company from its victims. They attempted to make the payments appear legitimate by categorising them as wages, consultancy fees, and dividend payments on their shareholdings. In one email Daniel Nwikpo stated: “John what do you think of a £150,000 overall split? I’ve had to re-gig it so Bari gets a decent whack”. In that instance Daniel and John Nwikpo received £50,000 each while Mr Ferry, Tullett Brown’s registered director, received £750.
Between June 2009 and March 2012 Barinua Nwikpo and his so called “consultancy” company Tamar Ltd, which was used to siphon off the victims funds, received a total of £383,409 from Tullett Brown. John Nwikpo and his company Johnnystone Ltd received a total of £678,476 with Daniel Nwikpo receiving £538,294. Mr Ferry and his company Brad Baker Ltd received a total of £156,619.
Commenting on these cases Paul Titherington, a Senior Official Receiver in the Public Interest Unit, said:
The land being sold by the company was simply not suitable for investment purposes. Unfortunately the victims were persuaded to part with their money by sharp sales techniques used by the company and its brokers. As with many land bankers the scammers simply moved into selling carbon credits to the same victims. Unfortunately carbon credits, in particular VERs, are an even worse investment than the land. The only people that profited from this operation were the Nwikpos and their salesman.
The disqualification regime exists to protect the public and these disqualifications follow an investigation by the Public Interest Unit, a specialist team of the Insolvency Service, whose involvement commenced when the Official Receiver was appointed as Provisional Liquidator on the application of the Secretary of State when the petition to wind up the company on the grounds of public interest was presented following an investigation by Company Investigations.
Notes to Editors
Tullett Brown Ltd was incorporated on 6 May 2009. Its trading address was at 5th Floor, 133 Houndsditch, London EC3A 7BX.
The petition to wind up Tullett Brown Ltd was presented on 28 March 2012 by the Secretary of States for Business, Innovations and Skills in the public interest following an investigation conducted by Company Investigations (Live), a specialist unit within the Insolvency Service which uses powers under the Companies Act 1985 (as amended) to conduct confidential enquiries into the activities of live limited companies in the UK on behalf of the Secretary of Business, Innovations & Skills (BIS).
On 30 March 2012 the Official Receiver was appointed as provisional liquidator of Tullett Brown Ltd on the application of the Secretary of State. The role of a provisional liquidator is to secure and protect the assets and property of the company pending the determination of the winding up petition.
The winding up order was made against Tullett Brown Ltd on 27 June 2012.
Foxstone Carr Ltd was incorporated on 20 January 2010. Its trading address was at 5th Floor, 133 Houndsditch, London EC3A 7BX.
The petition to wind up Foxstone Carr Ltd was presented on 13 September 2012 by the Secretary of States for Business, Innovations and Skills in the public interest following an investigation conducted by Company Investigations (Live), a specialist unit within the Insolvency Service which uses powers under the Companies Act 1985 (as amended) to conduct confidential enquiries into the activities of live limited companies in the UK on behalf of the Secretary of Business, Innovations & Skills (BIS).
The winding up order was made against Foxstone Carr Ltd on 14 November 2012.
On 21 March 2015, Barinua Carr Nwikpo signed a disqualification undertaking for 14 years in respect of his conduct whilst acting as a director of Tullett Brown. The period of disqualification commenced on 22 April 2015. He is of London and his date of birth is 12 November 1974.
On 21 March 2015, John Ekpobari Nwikpo signed a disqualification undertaking for 14 years in respect of his conduct whilst acting as a director of Tullett Brown Ltd and Foxstone Carr Ltd. The period of disqualification commenced on 22 April 2015. He is of London and his date of birth is 31 May 1977.
On 21 March 2015, Daniel Nwikpo signed a disqualification undertaking for 14 years in respect of his conduct whilst acting as a director of Tullett Brown Ltd and Foxstone Carr Ltd. The period of disqualification commenced on 22 April 2015. He is of London and his date of birth is 28 December 1979.
On 1 October 2014, Bradley Peter Ferry signed a disqualification undertaking for 14 years in respect of his conduct whilst acting as a director of Tullett Brown Ltd. The period of disqualification commenced on 24 October 2014. He is of 7 May 1977.
A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:
- act as a director of a company
- take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
- be a receiver of a company’s property
In addition that person cannot act as an insolvency practitioner and there are many other restrictions are placed on disqualified directors by other regulations. Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Further information on director disqualifications and restrictions is available.
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice. Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.
All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit (South), The Insolvency Service, 2nd Floor, 4 Abbey Orchard Street, London WC1B 3SS. Tel: 020 7637 6230 Email: email@example.com.
Published: 22 June 2015
From: The Insolvency Service