Insolvency Service investigations lead to shutdown of ‘Recovery Room’ scam companies
Investigations by the Insolvency Service have led to six recovery room scam companies being ordered into liquidation in the public interest by the High Court on 2 December 2015 after, between them, leaving members of the public with losses of over £350,000, following empty promises of recovering investment losses they had suffered.
The investigations found that 5 of the companies were connected.
Petitions to order the companies into compulsory liquidation were presented by the Secretary of State for Business and were issued following confidential enquiries carried out by Company Investigations, part of the Insolvency Service.
The 5 connected companies, all with registered offices in London, were in operation between March 2014 and approximately January 2015 and resulted in at least £300,000 of losses to members of the public.
The companies targeted individuals who had previously purchased investments such as carbon credits and rare earth metals from other companies, some of which had previously been wound up in the public interest. ‘Exit strategies’ were promised and substantial ‘advance fees’ were required, which were in certain instances represented as refundable. In the case of Claremont, it further claimed that its guarantee which made promises of returns on sale was underwritten by AXA, which was untrue.
The companies involved were:
- Claremont Partnerships Limited
- Brookepoint Limited
- Brookcourt Trading Limited;
- Cotexx Trading Limited;
- Manor Trade Limited
The other company, Etonstanley Limited, was in operation between January 2014 and approximately March 2014 and resulted in at least £51,800 of losses to members of the public. The Company targeted elderly and vulnerable individuals who had already purchased carbon credits from companies that have been wound up in the public interest for trading without commercial probity and making false statements.
There was a complete lack of transparency in the affairs of all of these companies, with no presence at their registered offices and with the recorded directors being untraceable. Where information was available, fees paid to the companies were deposited into various bank accounts held by third parties, none of whom appear related to the companies in question.
David Hill, Chief Investigator with the Insolvency Service, said:
These companies operated what were effectively scam boiler room operations that had no prospect of retrieving lost investments.
The Insolvency Service will not allow such companies to fleece vulnerable and honest people. We will investigate these abuses and close down companies if they are found to be operating against the public interest.
Notes to Editors
The companies involved in the scam were:
- Claremont Partnerships Limited (CRO No. 08517351), incoporated 7 May 2013, registered address: 200 Aldersgate Street, London EC1A 4HD, Christopher Hives director
- Brookepoint Limited (CRN No. 08187477), incorporated 22 August 2012, registered address: 107 Cheapside, London EC2V 6DN, Michael Cunningham director
- Brookcourt Trading Limited (CRN No. 08065535), incorporated 11 May 2012, registered adddress: 1 Royal Exchange Avenue, London EC3V 3LT, Richard Charles Mathewson & Stephan Eric Clarke directors
- Cotexx Trading Limited (CRN No. 08058160), incorporated 4 May 2012, registered address: 9 Devonshire Square, London EC2M 4YF, Francis Arthur Green & Charles William Parker directors
- Manor Trade Limited (CRN No. 08112661), incorporated 20 June 2012, registered address: 55 Old Broad Street, London EC2M 1RX, Robert Andrew Clarke & David Elliot directors
- Etonstanley Limited (CRN No. 08781938), incorporated 19 November 2013, registered address: 29 Throgmorton Street, London EC2N 2AT, Alan Mill director
The petitions to wind up the first 5 companies above were presented in the High Court on 29 July 2015 and the companies placed into Compulsory Liquidation on 2 December 2015. All petitions were presented under the provisions of section 124A of the Insolvency Act 1986. The petition to wind up Etonstanley Ltd was presented on 8 September 2015.
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.
All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 4 Abbey Orchard Street, London, SW1P 2HT. Telephone: 0207 637 1110 Email: email@example.com.
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Published: 21 January 2016
From: The Insolvency Service