A director whose company was selling non-existent carbon credits has been disqualified for the maximum period of 15 years by the High Court, after taking nearly £200,000.
Jason Pistolas was the director of London-based Earnshaw Equities Limited which purported to invest in carbon credits for individuals. Although the company advertised its membership of two carbon credit trading registries, Earnshaw had no account and therefore no access to the carbon credits market.
According to company statements, £177,497 was received into the company bank account of which three-quarters was withdrawn in cash. During the Insolvency Service investigation following Pistolas declaring voluntary liquidation, creditors came forward with a total of £63,113 owed to them. At this point, the company had assets estimated at approximately £5,600 and liabilities of £8,051, resulting in an estimated overall shortfall of £2,451.Because Pistolas also failed to keep adequate financial records, it is not possible for further creditors to be identified.
Pistolas (38) has been disqualified from acting as a director for the maximum period under the law of 15 years for making sales by false representation and for failing to maintain or preserve accounting records.
Commenting on the disqualifications, Mark Bruce, a Chief Investigator at The Insolvency Service said:
The director in Earnshaw abused his position by taking money from individuals for investments that he knew were fictitious. This behavior is compounded by the failure to deliver records which would assist in identifying other investors or potentially recoverable assets.
The Insolvency Service will always look to remove from the business community those directors who act below the standards that should be expected of them.
The disqualification follows an investigation by the Insolvency Service’s Insolvent Investigations Team in London.
Notes to Editors
Earnshaw Equities Limited (CRO No. 08040690) was incorporated on 23 April 2012 and went into creditors’ voluntary liquidation on 8 May 2013. Its registered office was at 68 Lombard Street, City of London, EC3V 9LJ.
Jason John Pistolas is of London and his date of birth is 18 July 1977.
The order on 23 July prevents Pistolas from acting as a director of a limited company for 15 years from 13 August 2015 without leave of court.
Earnshaw went into voluntary liquidation in May 2013. the Insolvency Service investigation found that between by 21 June 2012 and 8 February 2013 Earnshaw made sales of at least £63,113, during which time:
- the company held itself out to be an account holder of two carbon trading registries through which it would trade VCUs for its clients, in fact Earnshaw failed to obtain an account with either registry and consequently had no direct access to the VCU market
- the company displayed the logos of two independent non-profit organisations on its sales literature without their permission
- the company made sales, in January 2013 of at least £20,876 of VCU’s in a project which at that time had not issued any VCU’s and therefore the VCU’s did not exist on the market
- further sales of £1,474 had invalid serial numbers issued to the clients, and two clients having paid £9,315 were issued VCU’s with overlapping serial numbers.
During trading £177,497 was received into the company bank account and of which £131,715 was withdrawn from the account in cash. The remainder was spent by way of online payments, cheque, debit card and direct debits. Mr Pistolas failed to maintain records that could explain the expenditure or identify further clients who may have lost out.
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. 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.
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Published: 3 September 2015
From: The Insolvency Service