Dodgy duo disqualified for selling £1.9 million of bogus investments
Philip David Claremont Morris and William Edward Strutt, directors of Capital Acquisitions Ltd (CAL) and City Asset Partnership Limited (CAP), both based in London, have been banned from acting as directors.
Mr Morris gave an undertaking to the Secretary of State for Business, Innovation & Skills to be disqualified as a director for a period of 14 years and Mr Strutt has been disqualified as a director by the High Court for a period of 13 years. Both received bans for selling Voluntary Emission Reductions (VERs), a type of carbon credit, to members of the public as an investment.
This disqualification follows investigations by the Official Receiver at Public Interest Unit, a specialist team of the Insolvency Service, whose involvement commenced with the winding up of the companies, in the public interest following investigations by Company Investigations into the affairs of the companies.
The disqualification regime exists to protect the public. Mr Morris’ disqualification from 7 July 2015 and Mr Strutt’s disqualification from 19 November 2015 means that they cannot promote, manage, or be directors of a limited company until 2029 and 2028 respectively.
The Official Receiver’s investigation uncovered that Mr Strutt and Mr Morris caused and/or allowed CAL and CAP to sell VERs to members of the public for investment purposes for £1.9 million on the basis that the VER’s would increase in value and could then be sold for a profit. However, CAL and CAP charged a mark-up of between £2.20 and £5.50 for VERs it purchased thereby hindering the VER’s as a viable investment from the out-set.
Furthermore, the Official Receiver, and indeed the market’s own self-regulating authorities, HM Revenue & Customs and the Financial Conduct Authority have been unable to identify a viable secondary market for VER’s further evidencing that VER’s were not a suitable investment for CAL and CAP’s customers. This information was available to Mr Strutt and Mr Morris prior to the first known sale of VERs to members of the public as an investment.
The absence of a viable market into which to sell VERs means that those members of the public who have purchased VERs from CAL and CAP will be unable to realise their “investment” and will suffer a financial loss as a result.
Commenting on this case Paul Titherington, Official Receiver in the Public Interest Unit, said:
The directors’ displayed a lack of commercial probity whilst selling carbon credits to hardworking members of the public. Those individuals are now left in a position where they cannot sell their carbon credits for profit or at all. The Insolvency Service will investigate those directors who sell dodgy investments.
As a result of this investigation, the marketplace has been protected from Mr Morris and Mr Strutt who have been banned from acting as directors for a substantial period of time.
Notes to Editors
Capital Acquisitions Ltd (CRO No. 07188920) was incorporated on 15 March 2010 as Capital Marketing Solutions Ltd. Its trading address was at The Broadgate Tower, 20 Primrose Street, London EC2A 2EW.
City Asset Partnership Ltd (CRO No. 07848242) was incorporated on 15 November 2011. Its trading address was also at The Broadgate Tower, 20 Primrose Street, London EC2A 2EW.
Philip David Claremont Morris is of Kent and his date of birth is 6 August 1975.
William Edward Strutt is of London and his date of birth is 9 February 1976.
The petition to wind up the companies was presented by the Secretary of State for Business, Innovations and Skills in the public interest following investigations conducted by Company Investigations (Live), another specialist unit within the Insolvency Service which uses powers under the Companies Act 1985 (as amended) to conduct confidential enquiries into the activities of live limited companies in the UK on behalf of the Secretary of State for Business, Innovations & Skills (BIS). Winding up orders against Capital Acquisitions Limited and City Asset Partnership Limited were made on 1 May 2014.
On 13 June 2015, Mr Morris signed a disqualification undertaking for a period of 14 years. The period of disqualification will commence on 7 July 2015.
On 28 October 2015 in the High Court of Justice, Registrar Baister ordered that Mr Strutt be disqualified for a period of 13 years. The period of disqualification will commence on 19 November 2015.
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.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. 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: 1 December 2015
From: The Insolvency Service