£1.5 million land banking scam shut down by the Insolvency Service
Gilbert Webb Estates Limited which marketed residential-sized plots of undeveloped land at a site in Cheshunt, Hertfordshire to the public for sale as an investment opportunity has been ordered into liquidation by the High Court on grounds of public interest following an Insolvency Service investigation.
The company was found to have continued a land banking scheme previously carried on by Complete Building Systems Limited and other companies whose affairs have also been investigated and brought to an end by the Insolvency Service for ripping off the public.
The investigation into Gilbert Webb Estates Limited showed that the company targeted investors – including recovering cancer sufferers – were misled into buying near-worthless plots of land by claiming that investing in the land was more secure than pension plans, equities or ISA’s.
The company falsely claimed to be regulated by the FCA and that investors could expect short term gains of between 200-400 per cent.
The company’s now defunct website claimed:
At Gilbert Webb Estates Ltd we have gathered together over 100 years of collective experience in property acquisition, development and building together with our surveyors, architects and solicitors.
We adhere to the same principals (sic) used by major developers and construction companies. The one golden rule is location, location, location.
Our land brokers are fully conversant with all aspects of land acquisition, and development. We identify and after much deliberation purchase sites that hit our exacting selection criteria.
With a strong track record as a commodity and exceptionally high growth potential, analysts agree that strategically placed land should be included in every astute investor’s portfolio.
The investigation found that the majority of the £1.5 million received from investors, being some £959,000, was withdrawn in cash from the company’s account.
Welcoming the Court’s winding up decision, Company Investigations Supervisor Chris Mayhew said:
This was a bare-faced scam on pensioners who have lost out financially and otherwise, unlike those behind the company who peddled near worthless plots of land to the public for investment.
Contrary to the company’s claims, the only collective expertise was the skill to part people from their money.
The Insolvency Service has strong enforcement powers and we will not hesitate to use them to take action against rotten companies whose activities, as here, can devastate lives in particular older and vulnerable investors who may suffer emotionally and psychologically from the impact of incurring significant financial loss and lose confidence to manage their own affairs.
Notes to Editors:
Gilbert Webb Estates Ltd (07969784) was incorporated on 29 February 2012. The registered office from incorporation to 29 March 2012 was 8 Stamford Drive, Bromley, Kent, BR2 OXF and thereafter 2nd Floor, Berkeley Square House, Berkeley Square, London, W1J 6BD to present date. The sole recorded director throughout has been Mr Bradley James Mortimer. No secretary is shown to have been appointed. The company’s share capital is shown to be 1 share of £1 held by Mr Mortimer. No accounts or Annual Returns have been filed.
The company’s now defunct website was www.gilbertwebbestates.com.
The grounds for winding up the company were: 1. lack of commercial probity by making misleading and unfounded statements and operating objectionable and/or improper sales practices 2. continuation of a method of trading which is contrary to the public interest 3. failure to co-operate with the investigation and failure to maintain, preserve and/or make available to the investigation adequate books and records 4. failure to file Accounts and Annual Returns.
The petition to wind up the company, which was unopposed, was presented in the High Court on 30 July 2014 under the provisions of section 124A of the Insolvency Act 1986 following confidential enquiries carried out by Company Investigations under section 447 of the Companies Act 1985, as amended. In ordering the company into liquidation on grounds of public interest on 18 December 2014 Mr Registrar Baister said:
This is a petition by the Secretary of State to wind up Gilbert Webb Estates Limited in the public interest. This is a land banking case. The company does not appear to contest so it proceeds on an uncontested basis. The company marketed land in Cheshunt in Hertfordshire. The plots of land were sold at very, very significant mark-ups, said to be in the range of 400 per cent. The scheme as usual could make no commercial sense. There was no genuine prospect of developing the land, particularly given the indication of the local authority. In that sense, we are dealing with a conventional land banking misrepresentation case. Indicative of that though is also the further point relied on, which is that a number of other companies dealing with the sale of land at Cheshunt were wound up in the public interest: Raincode Limited, Hildon Properties Limited, Boldacre Limited, Century Property Group Limited, all of which companies have been associated with a Mr Ballard and a Mr Tull, whose names I think I recognise from some of those proceedings. It is alleged that they have also played a role in relation to this company; so there is, as so often, a hint at least, even if it is not perhaps totally proven, of continuity between this company and preceding ones.
Turning to the allegations themselves, the first allegation is that the company traded on the basis of misleading and unfounded statements. It was stated on the company’s website that the land in question was strategically located, the promise of returns of up to 400 per cent in 12 months or less and the rather colourful detail of which Mr Mullen [Counsel for the Secretary of State], has reminded me that, in one case, an investor was told he would receive a Tesco loyalty card entitling him to 50 per cent discounts because his plots had been earmarked for a Tesco supermarket. The reality was, as I have already said, that the land had no real prospect of development and the true value was considerably less than investors were led to believe.
The second part of the allegation is the objectionable sales practices: there was cold calling and high-pressure. Mr. Mullen draws attention to the fact that one customer alone was contacted virtually every day for some months, often several times a day. It does seem to me that that is itself an objectionable practice. The third allegation is the continuation of trade contrary to the public interest. I have already alluded to the allegation of continuity with previously wound up companies. The fourth allegation is a failure to cooperate. I should perhaps have mentioned earlier that the sole registered director of the company was a Mr Mortimer. He has failed to respond to the investigator’s requests and that lack of cooperation is, of course, itself sufficient reason to ground winding up, particularly given the unexplained nature of some of the transactions the company was involved in. The final allegation is a simple allegation that accounts due on 28 November 2013 and/or returns due on 28 March 2013 have not been filed. For all those reasons, it seems to me that it is in the public interest for the company to be wound up.
The investigation also uncovered links with other companies that were previously engaged in selling land to the public at exaggerated prices which have earlier been ordered to close on grounds of public interest:
- Century Property Group Ltd, formerly Century Land Group Limited (CRO No. 06726999) was ordered into liquidation on grounds of public interest on 4 April 2012
- Boldacre Ltd (CRO No.07435084) was ordered into liquidation on grounds of public interest on 30 May 2012
- Trinity Associates Limited (CRO No.06971405) was ordered into liquidation on grounds of public interest on 10 April 2013
- Hildon Property Limited (CRO No.07193895) and Raincode Ltd (CRO No.07435077) were ordered into liquidation on grounds of public interest on 10 May 2013
Mr Carl Anthony Ballard and Mr Mark John Tull were each disqualified from acting as directors as a result of undertakings given to the Secretary of State in respect of their conduct as directors for a period of 14 years commencing on 10 and 22 July 2014 respectively – see News Release: “Six directors landed with a total 74 years disqualification in land banking scam” issued on 19 August 2014.
Company Investigations, part of the Insolvency Service, uses powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK on behalf of the Secretary of State for Business, Innovation & Skills (BIS).
Further information about live company investigations 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.
By virtue of the winding up order all public enquiries concerning the affairs of the companies should be made to: The Official Receiver, Public Interest Unit , 4 Abbey Orchard Street, London, SW1P 2HT. Telephone: 0207 637 1110 Email: email@example.com.
Published: 30 January 2015
From: The Insolvency Service