Complete land banking scam wound up in the High Court
Four companies involved in the mis-selling of undeveloped land for investment to the public, raising £3.3m in the process, have been ordered into liquidation in the High Court on grounds of public interest following an Insolvency Service investigation.
Complete Building Systems Limited, Rawtenstall CBS Limited, Evesham CBS Limited and Hounslow West London Limited were all wound-up on 18 December, after the High Court found them, to have continued a thoroughly disreputable land banking scheme and to have misled the public into buying overpriced plots of land for investment.
The companies were formerly based at offices at The Coach House and at Commercial House in Bromley, Kent.
Investors who had bought plots of land from an earlier company called The Property Partnership (see note 6) were told that Complete Building Systems Limited would buy from or sell on behalf of investors plots which they had bought from The Property Partnership.
Welcoming the Court’s winding up decisions Chris Mayhew, Company Investigations Supervisor at the Insolvency Service, said:
Investors were bullied and lied to by these rogue companies and their representatives to persuade them to invest in plots of land of negligible value.
Some investors were falsely told that unless they bought more plots their existing plots would not be developed and would become recreational plots such as flower beds or children’s play area and that they would then be charged maintenance by the local authority.
In some cases particularly vulnerable investors, some suffering some form of physical or mental disorder, were cynically targeted and ripped off.
The Insolvency Service will simply not allow such companies to fleece vulnerable and honest people and will investigate abuses and close down companies if they are found to be operating or about to operate, against the public interest.
Complete Building Systems Limited sold plots of land at Rawtenstall and Evesham. Its marketing of those sites co-incided with the commencement of the Secretary of State’s statutory investigation into RTW (Burnhill) Ltd and Burnhill Land Investments Limited which were both ordered into liquidation on grounds of public interest on 7 August 2013 (see notes 6 & 7).
In addition to the Rawtenstall site (initially bought by a third party for £40,000 and divided into 165 plots) and the Evesham site (initially bought by a third party for £45,000 and divided into 100 plots), plots were sold at several other sites, namely:
- Goffs Oak, Hammond Street, Waltham Cross, Hertfordshire
- Cross Keys, Norwich
- Snakey Lane, Feltham
- Boal Quay, Kings Lynn.
Plots were sold to investors for between £4,500 and £15,000 each.
At least £3.3 million was raised from the public of which some £1.4 million was paid out in commission to sales staff including a Mr Michael Doohan and a Mr Steven Sulley. Additionally payments were made to Mr Christopher Shipton, the registered director of the four companies, totalling some £627,000.
According to Mr Shipton land could be “sold for whatever price you wanted”.
Notes to Editors:
Complete Building Systems Limited (CRO No. 05314110) was incorporated on 15 December 2004 in the name Runstart Ltd. The name of the company was changed to its present style on 13 June 2005. The registered office of the company from incorporation to 29 June 2005 was 16 Winchester Walk, London, SE1 9AQ; from 29 June 2005 to 19 January 2007 42 Baston Road, Hayes, Bromley, Kent, BR2 7BE and from 19 January 2007 to present date Churchmill House, Ockford Road, Godalming, Surrey, GU7 1QY. The recorded directors of the company have been Mantel Nominees Limited from incorporation to 13 June 2005 and thereafter Mr Christopher Shipton. The secretary of the company from incorporation to 13 June 2005 was Mantel Secretaries Limited and thereafter Mrs Jacqueline Anne Shipton until 1 April 2011. No successor is shown to have been appointed secretary. The company’s share capital is shown to be 2 ordinary shares of £1 each and shown to be held by Mr Shipton (1 share) and Mrs Shipton (1 share). The company’s most recent filed accounts are for the year ended 31 March 2013 and show current assets of £229,653 (of which £217,919 is shown to be due from companies under common control) and creditors of £240,990 (of which £214,033 is reported as owing to Mr Shipton) and accumulated losses of £11,337.
Rawtenstall CBS Limited (CRO No. 07603670) was incorporated on 14 April 2011. The registered office throughout has been Churchmill House, Ockford Road, Godalming, Surrey, GU7 1QY. The sole recorded director of the company throughout has been Mr Christopher Shipton. No secretary is shown to have been appointed. The company’s share capital is shown to be £1 comprising 1 ordinary share of £1 shown to be held by Mr Shipton. The company’s most recent accounts are for the 13 months ending 30 April 2013 and show no assets and liabilities of £2,3728 and accumulated losses of £2,373.
Evesham CBS Limited (CRO No. 07603747) was incorporated on 14 April 2011. The registered office throughout has been Churchmill House, Ockford Road, Godalming, Surrey, GU7 1QY. The sole recorded director of the company throughout has been Mr Christopher Shipton. No secretary is shown to have been appointed. The company’s share capital is shown to be £1 comprising 1 ordinary share of £1 shown to be held by Mr Shipton. The company’s most recent accounts are for the year ended 30 April 2013 and show no assets and liabilities of £2,848
Hounslow West London Limited (CRO No. 07813463) was incorporated on 18 October 2011. The registered office throughout has been Churchmill House, Ockford Road, Godalming, Surrey GU7 1QW. The sole recorded director throughout has been Mr Christopher Shipton. No secretary is shown to have been appointed. The company’s share capital is shown to be £1 comprising 1 ordinary share of £1 shown to be held by Mr Shipton. The company’s most recent accounts are dormant accounts for the year ending 31 October 2013.
The grounds for winding up each company are variously:
- Objectionable trading practices/misleading and unfounded statements
- Failure to preserve or maintain accounting records
- Failure to exercise proper control of trading
- Risk of continuation of objectionable sales practices.
The Property Partnership was the trading style of a company called Ultraclass Limited (CRO No. 04940563) which was placed into creditors voluntary liquidation on 4 April 2011 with no assets and reported liabilities of £228,383. Mr Scott Assemakis and Mr David Evans (the de facto directors of Ultraclass Limited, Burnhill Land Investments Limited and RTW (Burnhill) Ltd) were each disqualified from acting as directors as a result of undertakings given in respect of their conduct as directors for a period of 11 years each on 18 June 2013. Three other directors, Mr Gavin Gravesande, Mr James Dominic and Mr James Whatley were also disqualified - see News Release Five directors landed with 53 years’ disqualification for £7 million land banking scam issued on 26 July 2013.
Burnhill Land Investments Limited (CRO No. 05834947) and RTW (Burnhill) Ltd (07274223) were ordered into liquidation on grounds of public interest on 7 August 2013 notwithstanding they entered into creditors voluntary liquidation on 10 August 2011.
The petitions to wind up the present four companies were 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.
The petitions were initially opposed by the companies but on 5 December 2014 the companies’ solicitors confirmed that it was no longer the intention of the companies and their sole director, Mr Christopher Shipton, to defend the petitions. This was said to be a financial decision and not an admission of the allegations.
In ordering the companies into liquidation on grounds of public interest on 18 December 2014 Mr Registrar Baister said:
This is the unopposed hearing of petitions presented by the Secretary of State for Business Innovation and Skills to wind up four companies involved in what is commonly referred to as land banking. The unchallenged evidence is contained in the lengthy witness statement of Mr Paul Melton who, along with others, was authorised to investigate. Mr Melton served his authorities on the recorded director of the companies Mr Christopher Shipton and on a host of people set out in paragraph 19 of his detailed witness statement including lawyers, accountants and others. Mr Shipton told him that from March 2011 Complete Building Systems Limited, Rawtenstall CBS Limited and Evesham CBS Limited were used to operate a land banking scheme at a number of sites in England. Rawtenstall CBS Limited was to sell land in Rawtenstall. Evesham CBS Limited was to sell land in Evesham. Complete Building Systems Limited was to sell land at other locations including some in Cheshunt, Hertfordshire. The picture that emerged is that Complete Building Systems Limited conducted the selling activity on behalf of all those companies and monies found their way into the three companies’ accounts in what Counsel for the Secretary of State Mr Mullen describes as on an indiscriminate basis. A further company, Hounslow West London Limited was to sell land in Hounslow. The plots of land were largely sold by cold calling consumers and by the means of marketing material containing the usual misleading information. I say usual as this case has all the hallmarks of similar cases in which this Court has been concerned for some time. The Evesham land was described as having already been identified as being part of a larger site potentially suitable for development by the Local Borough. In fact the land had been ruled out for development in 2006. The Rawtenstall site was marketed on the basis that the area was the target for 2,600 homes by 2026 whereas the local authority had indicated there would be no major releases of green belt land in the foreseeable future. The Hounslow land is in the metropolitan green belt and no changes to its status are proposed that would warrant the selling of the land other than at its green belt value. As is common in these types of cases high pressure sales techniques were used and consumers were told that Complete Building Systems Limited would buy from, or sell on behalf of investors, land which they had purchased from another land banking company. In other cases consumers were told that they would need to purchase additional land or risk their existing plots being re-zoned as recreational land. Short term gains were promised. The allegations are conveniently summarised by Mr Mullen at paragraph 12 of his skeleton. The Secretary of State’s principal objection is the trading practices and the misleading and unfounded statements that were made. The detail of these is conveniently summarised in the witness statement which brings together the information that not all was what it seemed. It was a variation of the old Spanish prisoner fraud. The allegations don’t just stop at the allegation of cold calling that is described at paragraph 270. The companies seem to have used extensive marketing material the nature of which is described in paragraph 266 and considerable detail is given about the misleading information they contained. At paragraph 271 Mr Melton deals with sales techniques. At paragraph 275 he details the promises that were made to consumers. The promises seem to have been false. He also describes the usual representations of short term returns if the punters invested. Paragraph 281 gives details about the kind of inducements to invest. Paragraph 285 describes the promises made if further investment is made. Paragraphs 288-291 describes the threats that current plots will get re-zoned without the purchase of additional plots. Paragraph 292 gives an example by reference to a specific case. Other false reasons were given. At paragraph 330-331 Mr Melton describes the failure to retain company documents and the abandoning of computerised records. Also the invoices raised for matters that have not been particularised and that invoices seem to have been raised for matters that are wrong or incorrect. Mr Shipton could not explain payments to third parties. In general terms the records are inaccurate or insufficient and Mr Shipton admits that he failed to exercise proper financial control. Further he says that he let the sales force get on with things with inadequate supervision. He admits that he did not take an active role. It seems that many property transfer documents appear to be false. In short the uncontested allegations are sufficient to wind up the companies which are intertwined. All of the Secretary of State’s uncontested allegations are made out on that basis and for this reason I will order the winding up of all four companies.
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 can be found on our website.
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.
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By virtue of the winding up orders 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: firstname.lastname@example.org
Published: 9 January 2015
From: The Insolvency Service