Press release

Eco con wound up in the High Court

Eco Business Management Limited, a company shown to operate from London and Stockholm, selling carbon credits to the public for investment, was ordered into liquidation on 4 March in the public interest for misleading potential investors.

The liquidation in the High Court followed a petition presented by the Secretary of State for Business, Innovation & Skills to wind up the company and followed confidential enquiries by Company Investigations, part of the Insolvency Service. The petition was unopposed.

The investigation found that the company mis-sold carbon credits to the public for investment with investors persuaded by high pressure sales techniques and false and misleading statements to pay inflated prices of up to £11.95 for each credit and that in some instances their credits were later retired (cancelled) without their knowledge or consent.

The Court heard that investors were falsely told they would receive returns of up to 82 per cent within 6 to 24 months and that the company had businesses lined up to acquire the carbon credits which would provide investors with the promised gains. Investors seeking news of their investment were falsely told that the company had entered into liquidation.

Welcoming the Court’s winding up decision Chris Mayhew, Company Investigations Supervisor, said:

According to a Mr Aaron Whiteman, one of the individuals involved in acquiring the company registration in October 2011, the company did not trade or have a bank account or any records or employees and that he ‘handed over’ the company to a broker company whose name he could not recall other than he dealt with someone called Chris whose surname and contact details he says were unknown to him. When asked what he thought would happen as a result he said that he ‘did not give a s***’ as he was doing other things.

Dormant accounts were filed for Eco Business Management Limited for periods in which the company was clearly trading with the public selling them overpriced carbon credits for investment with promised short term returns of up to 82 per cent. It claimed to be a sophisticated international business and to be ‘covered’ by the FCA which it was not.

The company claimed to be an organisation that treasures its role as a leader in the carbon finance industry but in reality was an eco con on investors cutting their savings not pollution.

I would once more urge potential investors not to respond to cold calling manipulative and deceitful investment sharks out to make ‘easy money’ from you.

The Insolvency Service will not allow rogue companies to rip-off 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.

The grounds to wind up the company were its objectionable trading practices, abandonment, lack of transparency and lack of co-operation with the investigation and breach of the Companies Act 2006.

Notes to Editors:

Eco Business Management Limited (CRO No. 04994613) was incorporated on 15 December 2003 in the name HB35 Limited. The name of the company was changed on 10 October 2005 to Stratton Sport Limited and changed again on 12 October 2011 to its present style. The registered office from incorporation to 19 November 2013, was 27 New Bond Street, London, W1S 2RH and from 19 November 2013 to present date 19 Berkeley Street, London, W1J 8ED. The directors are shown to have been Kingsland (Nominees) Limited from incorporation to 6 June 2012, Mr Christopher John Hammond from 1 June 2011 to 13 October 2011 and Mr Sean Michael Patrick Madden from 10 October 2011 to present date. The company secretary throughout is shown to have been Kingsland (Services) Limited. The company’s share capital is shown to be two ordinary share of £1 each held by Kingsland Nominees Ltd (one share) and Kingsland Services Ltd (one share). Dormant accounts have been filed for each accounting period throughout, the most recent made up to 31 December 2013 and shown as approved by Mr Madden.

The company’s former website was: www.ecobusinessmanagement.com

Investors were informed that the company’s address was World Trade Centre, Klarabergsviadukten 70 Stockholm, S-107 24, Sweden. Another address provided was Augustendalsvagen 7, 13126 Nacka Strand, Stockholm, Sweden.

One investor paid SJL Risk Limited (see note below) but received paperwork from Abacus Advisory Ltd (see note below).

The petition to wind up the company was presented in the High Court on 6 January 2015 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.

In ordering the company into liquidation on grounds of public interest on 4 March 2015 Mr Registrar Jones gave a damning judgement in which he said:

This is the unopposed petition of the Secretary of State seeking the winding up of Eco Business Management Limited on the grounds firstly because of the company’s lack of transparency in its management and failure to co-operate with the investigation and failure to maintain preserve or deliver up adequate accounting records; secondly the company’s objectionable trading practices; and thirdly breach of the Companies Act in that dormant accounts were filed for periods in which the company was trading. It is plain from the evidence before me that each of the grounds for winding up as verified by Mr Mayhew and set out in the evidence in support by the investigator Mr George are made out. The evidence shows that carbon credits were sold to the public as investments via unsolicited telephone calls and sales agents using high pressure sales tactics. Notwithstanding this activity the company has filed dormant accounts. Those accounts are plainly false as the investigation has identified 22 individuals who purchased carbon credits from this company in excess of £100,000. The proceeds were forwarded to a Swiss bank account. It seems that the company performed a sales agent role on behalf of Eco Asian Carbon Consulting Ltd, a Singapore based company. This is a company that was subject to a warning issued on 2 April 2013 by the then Financial Services Authority.

The evidence before me shows that in October 2011 Hammond Bale LLP solicitors were contacted by a Mr Aaron Whiteman, an associate of another client of the firm called Mr Ulrik Debo who was interested in acquiring a company for the purpose of trading in carbon credits. A Mr Sean Madden was to act as the company’s director and he completed the relevant forms at the solicitor’s offices. Hammond Bale LLP received no instructions to transfer the subscriber shares or issue further shares resulting in the shares remaining in the names of the nominee parties used to incorporate the company. I should make clear that Hammond Bale LLP have not been involved in any of the actions complained of, and there is no criticism of them. Their role was purely formal on the instructions they were given.

On 10 October 2013 Hammond Bale LLP received instructions, by email, from Mr Debo to apply to strike off the company.

During the course of the investigation Mr Whiteman and Mr Debo were both contacted. Mr Madden did not respond to any of the correspondence sent to him by the investigator.

When asked why he was not a director Mr Whiteman replied that he was made bankrupt in 2006 or 2007 in Sweden which may explain the reason for Mr Madden’s involvement. On 22 April 2014 the investigator wrote to Mr Madden who was said to live in Sweden. The letter was returned marked “moved” by the Swedish postal authorities.

A letter sent by the investigator to Mr Madden to the forwarding email address provided to Hammond Bale LLP was returned with the message stating ‘Mr Aeron Whiteman is no longer with the Debondo organisation’. The investigator also wrote to Mr Madden at Eco Business Management’s trading address shown in its literature being Augustendalsvagen 7, 13126 Nacka Strand, Stockholm, Sweden and via email to the office email address also shown. The letter was returned by the Swedish postal authorities. No response has been received from Mr Madden and the investigator has been unable to obtain any further contact details for him.

Mr Debo of Debondo Capital states that Debondo Capital was an umbrella organisation for a group of individuals allowing them to share contacts. Further that he has had no contact with Mr Madden and has no knowledge of him other than what he was told by Mr Whiteman.

The conclusion to be drawn from the information provided to the investigation is that the first of those responsible for the setting up of the company are Mr Whiteman together with Mr Madden and potentially Mr Debo depending of course if the information provided by Mr Whiteman is true.

Mr Whiteman stated that the company did not trade and that he “handed it over” to a broker business at no cost and left it in their hands. Mr Whiteman could not recall the name of the broker business or any contact details or the names or contact details of the people involved other than someone who was called Chris whose surname he does not know.

The company’s lack of transparency is confirmed by the fact of dormant accounts being filed and by the above concerns. The overall conclusion to be drawn is that the lack of transparency is more opaque than ever.

It is plain that the company treated members of the public as investors and that its business is objectionable because sales of carbon credits were presented to them as an investment opportunity and on the basis that they would increase in value substantially and quickly. The evidence shows that investors will not see any increase in the value of their credits to the extent necessary for them to realise a profit. The evidence shows they are a wasting asset not an investment and that false promises were made of substantial gains when in fact the credits are a devaluing asset and no ready market exists in which to dispose of them.

The matters set out in paragraph 155 to 161 of the evidence discloses that the company did not have companies wanting to buy the credits from investors as promised to them and the representations to investors to this effect are shown to be plainly untrue

This is a fraud namely the sale of a wasting asset to members of the public as investments and it is plain that all of the grounds have been made out.

There is absolutely no doubt as to the decision I will make. It cannot be in any doubt that this is a company that should be wound up and I do so order”.

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 has issued consumer information on carbon credit trading and what to consider before investing.

The Financial Conduct Authority has published the conclusions of a survey to find out whether anyone has profited by buying carbon credits as investments and also help for those most at risk of investment fraud.

On 2 April 2013 the Financial Conduct Authority issued a warning about Eco Asian Carbon Consulting Ltd, a Singapore based company.

SJL Risk Limited (CRO No. 07386653) was incorporated on 24 September 2010. On 23 April 2014 the company resolved to place itself into voluntary liquidation with assets reported by its sole remaining director Mr James Russell Enright of £43,885 (primarily comprising carbon credits) estimated to realise £4,378 and reported liabilities of £329,455 (primarily due to carbon broking companies in the UK and overseas). The liquidator is Mr Myles Jacobson, Gable House, 239 Regents Park Road, London, N3 3LF.

Abacus Advisory Ltd (CRO No. 08212934) was incorporated on 13 September 2012. On 25 March 2014 the company applied to be voluntarily struck off. Shortly afterwards on 05 June 2014 the company nonetheless resolved to place itself into voluntary liquidation with no assets reported by its sole recorded director of Mr Philip Clarke and reported liabilities of £500. The liquidator is Mr Ashok Bhardwaj of 47-49 Green Lane, Northwood, Middlesex HA6 3AE.

In November 2013 the Insolvency Service highlighted action taken by the Secretary of State against 19 companies involved in the marketing of carbon credits to the public for investment and more recently warned investors of such activity following the closure of two more such 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).

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.

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: piu.or@insolvency.gsi.gov.uk.