Press release

Companies shut down for operating misleading pension liberation scheme

KJK Investments Ltd and G Loans Ltd, two North West-based companies, were wound up by the High Court for operating a misleading pension-backed loan and investment scheme in which clients invested £11.9m.


The liquidation was ordered following an investigation by the Insolvency Service.

The investigation found that the companies operated what is commonly known as a ‘pension liberation’ scheme. Clients were encouraged to obtain a loan from Windermere-based G Loans Ltd, on the condition that they used their existing pension funds to purchase shares in the Liverpool-based KJK Investments Ltd.

Clients were led to believe that their investment in KJK Investments Ltd would increase in value by 6% each year and that these returns would be sufficient to enable the client to repay their loan from the proceeds of their pension upon retirement. Over a 2½ year period, KJK Investments Ltd received £11.9 million worth of investments from 209 clients.

The loans made to clients by G Loans Ltd were typically in the region of 50% of the amount invested by the client in KJK Investment Ltd shares. G Loans Ltd provided £6.3 million of loans to the same 209 clients.

The investigation found that KJK Investments Ltd was not a commercial lender (as it claimed to be), but that a significant portion of the funds invested by the clients were, in fact, lent by KJK Investments Ltd on uncommercial terms to G Loans Ltd. This was the only means by which G Loans Ltd was able to provide loans to the clients – meaning that the loans which clients received from G Loans Ltd were funded from their own pension funds invested in KJK Investments Ltd. This was not made clear to clients.

The loans provided by both KJK Investments Ltd and G Loans Ltd were on terms that allowed interest to be accrued rather than paid, such that G Loans Ltd was not in a position to repay its liability to KJK Investments Ltd, and that KJK Investments Ltd, in turn, could not pay a dividend to the clients that had invested in it. The remaining funds invested in KJK Investments Ltd were used to make loans to other associated companies on uncommercial terms and to pay substantial commissions, fees and salaries to those involved in the operation of the companies. Sales commissions totalled in excess of £900,000 whilst the directors received payments totalling £490,000.

The court was satisfied that the companies acted with a lack of commercial probity in the way in which they marketed the scheme to clients and that the scheme itself was lacking in any proper commercial basis – with the result that there was no realistic prospect of clients getting back the funds which they had originally invested in KJK Investments Ltd.

Colin Cronin, Investigation Supervisor, said:

Pension liberation is being widely promoted as an easy way of gaining early access to pension savings, particularly given the recent changes in pension legislation. Any schemes offering such benefits should be viewed with caution and independent financial advice should always be sought before entering into such a scheme.

In this case clients were not told that they were obtaining loans funded directly from their own pension pots. The Insolvency Service will investigate and bring to a halt the activities of companies that mislead clients in this way and that are found to be operating against the public interest.

Notes to editors

KJK Investments Ltd – company registration number 06884147 - was incorporated on 22 April 2009. The company’s registered office is at 16 Crosby Road North, Liverpool, Merseyside L22 0NY.

G Loans Ltd – company registration number 06784419 - was incorporated on 7 January 2009. The company’s registered office is at St Catherine’s Cottage, Patterdale Road, Windermere, Cumbria LA23 1NH.

The petitions to wind-up KJK Investments Ltd and G Loans Ltd were presented under s124A of the Insolvency Act 1986 on 8 August 2013. The companies were wound up on 15 April 2015 and the Official Receiver has been appointed as liquidator.

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.

All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Tel: 0161 234 8531 Email:

Published 22 June 2015