Mr Sami Raja, Mr Sandeep Singh Dosanjh and Mr Manjeet Matharu have been disqualified for 43 years between them for mis-selling Certified Emission Reduction carbon credits.
At the High Court on 17 February 2016, Registrar Clive Jones ordered that Mr Sami Raja, Mr Sandeep Singh Dosanjh and Mr Manjeet Matharu be disqualified for 43 years between them, relating to their mis-selling to the public of Certified Emission Reduction (“CER”) carbon credits as an investment product, even though there is no genuine secondary market in which investors can sell their purchases.
Mr Raja and Mr Dosanjh were given the maximum disqualification of 15 years each and Mr Matharu 13 years.
The Insolvency Service investigation, which led to their disqualifications, found that:
- Between 28 May 2013 and 7 August 2013 members of the public paid £899,107 to Kendrick Zale for the purchase of CER carbon credits.
- Kendrick Zale Limited purchased CER carbon credits from its suppliers at a cost of £0.67 and £0.87 per CER carbon credit but sold them on to its customers for between £2.82 and £3.10. This represents a mark up of at least 239% and a maximum of 359%.
During its trading Kendrick Zale Limited was not authorised to hold CER carbon credits by the Department of Environment and used other third parties to hold the carbon credits it purchased on behalf of its customers. These credits were not registered in the individual names of the customers rather they were held in the name of Kendrick Zale Limited in a sub account belonging to the third party. As a result of this the investors may not have access to the CER carbon credits they purchased.
The wholesale spot price of CER carbon credits at the date of Liquidation was just £0.13 per carbon credit, thus CER carbon credits are a wasting asset, further adding to the product’s unsuitability as an investment.
The Official Receiver, the Financial Conduct Authority and HM Revenue & Customs have not been able to identify a genuine secondary market; nor indeed have Mr Raja, Mr Dosanjh or Mr Matharu.
The lack of a secondary market for the re-sale of CER carbon credits, together with the mark-up over the costs price applied by Kendrick Zale Limited on the CER carbon credits, is such that customers will be unable to sell their CER carbon credits for a profit, or perhaps at all, and will suffer financial loss accordingly.
Mr Matharu facilitated the operation of the company by allowing two persons (Mr Raja and Mr Dosanjh) who were not formally appointed as directors to control the company’s affairs. Mr Matharu stated to the Official Receiver that he was not aware of the company’s trading activities and he “did not have a clue what carbon credits were”.
Registrar Jones stated that the actions of Mr Matharu were significantly serious to warrant a 13 year period of disqualification.
Mr Raja and Mr Dosanjh, who jointly controlled Kendrick Zale Limited despite not being formally appointed directors, were each given the maximum 15 years’ disqualification for their roles.
Registrar Jones said,
The company was set up for deception, and for personal profit at the expense of the public.”
The Official Receiver, Mr P Titherington, commented:
Where a company is placed into compulsory liquidation and is found to have made misrepresentations to the public as to the suitability and viability of a product for investment, we will seek lengthy periods of disqualification of the directors responsible as is seen in this case.
Notes to Editors
Kendrick Zale Limited (Companies Registration No. 08453156) was incorporated on 20 March 2013 and was placed into compulsory liquidation on the petition of the Secretary of State for Business, Innovation & Skills on 16 July 2014. The grounds for the winding up were abandonment, lack of cooperation, and trading with a lack of commercial probity by making misleading and unfounded statements to the public and using objectionable and/or improper sales practices.
Manjeet Matharu is of Grays, Essex and his date of birth is 22 October 1984. Sami Raja is of Grays, Essex and his date of birth is 24 December 1986. Sandeep Singh Dosanjh is of Grays, Essex and his date of birth is 8 April 1988.
On 2 October 2014 Mr N Ailyan of Abbott Fielding and Mr Steven Parker of Opus Restructuring LLP were appointed as joint-Liquidators.
Kendrick Zale Ltd also acted as a sales agent for IPR Capital Limited, which sold memberships of the limited partnership known as IPR Capital Mining 06 L, which looked to exploit an a gold mine based in Ecuador. IPR Capital Limited was placed into Liquidation on 1 April 2015 and the Official Receiver’s investigation into the viability of that product is continuing.
A carbon credit is a certificate or permit which represents the right to emit one tonne of carbon dioxide (CO2) and can be traded for money. The Financial Conduct Authority’s consumer information on carbon credit trading and what to consider before investing can be found here.
The Financial Conduct Authority has published help for those most at risk of investment fraud here.
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.
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Published: 1 March 2016
From: The Insolvency Service