Press release

Mastermind of unscrupulous African stove investment gets 14 year ban

Mark Andrew Ayres has been disqualified for 14 years from 15 July 2016 after an Insolvency Service investigation.

placeholder

Mark Andrew Ayres, previously known as Mark Eyres and Mark Heaver, acted as a director of Global Eco Projects Ltd (GEP), in breach of a prior director disqualification. He also caused it to both receive investor monies in breach of financial regulations, and fail to protect those monies, as contractually agreed with its investors.

In addition, two of GEP’s registered directors, John Roger Childs and Mark Francis Cooney, were disqualified for 7 years from 14 and 29 April 2016 respectively. This was for first allowing Mr Ayres to act until 31 July 2013 as mentioned above, and then their decision to continue trading from August 2013, receiving and disposing of further investment funds while insolvent, in breach of financial regulations and contract.

The disqualifications prevent Mr Ayres, Mr Childs and Mr Cooney from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of their disqualification terms.

The matters of unfitness, which Mr Ayres did not dispute in the Disqualification Undertaking, were that:

  1. Mark Andrew Ayres (Mr Ayres) acted as a director of Global Eco Projects Ltd (GEP) from 29 March 2012 to 6 August 2013, without the leave of the Court, whilst subject to a disqualification undertaking, contrary to section 13 of the Company Directors Disqualification Act 1986.

  2. Mr Ayres caused GEP both to receive £666,000 of investor monies from October 2012 to 31 July 2013, in breach of financial regulations, and to fail to apply those monies as required by contract, to the investors’ detriment:

  • investors were induced to make payment of £666,000 to the company on the basis of investment in a mission to help half a million families to live a healthier and safer life, by giving them a clean, efficient stove to cook on. The free distribution of stoves would generate an income through the obtaining of Gold Standard carbon credits. An interest payment of 30% of the loan was to be paid 24 months and 6 weeks from the agreement date and daily interest would then accrue at 12% per year, payable yearly in arrears, with the full capital of the loan to be repaid after 7 years

  • the terms and conditions of investor debentures included the following commitment from GEP: “The Company will place all stove funds in a separate bank escrow account for the sole use of purchasing Cook stoves”

  • no such account was created, only £32,395 was paid in respect of cookstoves before 31 July 2013, only 1,449 stoves were ever obtained, and on 31 July 2013 there was only £101,087 cash remaining.

  • in comparison, the marketing agents employed to introduce the investors charged £324,200 and, despite GEP accepting receipts of £275,586, attributed to Mr Ayres, repayments of these monies to 30 July 2013 left a balance due by Mr Ayres of £7,886

In addition, the company solicitors gave consistent advice in meetings, phone conversations and emails from 11 December 2012 until 11 June 2013 that:

  • under s21 Financial Services and Markets Act 2000 (“FSMA”), GEP was prevented from “communicating an invitation or inducement to engage in investment activity”

  • that the marketing material it produced should be signed off by persons authorised under FSMA

  • that, should the authorised person recommend it, this could lead to the need to offer refunds to existing lenders

No such authorised sign off, or specialist advice, was obtained.

Commenting on the disqualifications, Mark Bruce, Chief Investigator at The Insolvency Service, said:

This is a very serious case in which monies were extracted from members of the public; not only on the grounds of it being a safe investment, with a good rate of return, but that their money would be used to assist the lives of impoverished communities in Africa. In fact, their monies were principally spent on a combination of marketing fees for sales agents and repayments of monies owed to Mr Ayres. Indeed, the entire scheme was illegal from commencement, as the marketing of debentures is a regulated investment and GEP failed to sign off its marketing material from a properly regulated person

Mr Ayres was the De Facto MD of the company until August 2013. This case should be noted by anyone considering reacting to a disqualification as director, by continuing to run companies without registering themselves at Companies House. They should take note that the Insolvency Service will investigate which individuals are actually in control of corporate governance. We will then take action if there were unregistered directors, especially if a disqualification ban has been breached

Notes to editors

Mark Andrew Ayres’ date of birth is 14 September 1961 and he resides in Worcestershire and Basingstoke.

He had previously signed a Disqualification Undertaking in respect of International Trading Agency (Overseas Escorts) Limited: The period of disqualification was 6 years, which commenced on 12 November 2010.

John Roger Childs’s date of birth is 30 June 1952 and he resides in Hampshire.

Mark Francis Cooney’s date of birth is 14 July 1964 and he resides in Essex.

Global Eco Projects Ltd (CRO No. 08010794) was incorporated on 29 March 2012 and traded from Hart House, Priestley Road, Basingstoke, Hampshire RG24 9PU. The Company was established to create a project to provide cook stoves for Africa. The project was to be funded by way of unsecured loans to the Company which would be repaid over a period of time with interest.

The Company went into Administration on 20 June 2014 with an estimated deficiency for creditors of £893,343.

The Secretary of State has accepted a Disqualification Undertaking from Mr Ayres, effective from 15 July 2015, for 14 years.

The Secretary of State previously accepted Disqualification Undertakings from John Roger Childs and Mark Francis Cooney, both for periods of 7 years commencing from 14 and 29 April 2016 respectively. The matters of unfitness, which they did not dispute in their Disqualification Undertakings, were that:

Mr Childs abrogated his duties as director of GEP from October 2012 to 31 July 2013. As a consequence:

  • he allowed a disqualified director to control company banking from 2 April 2013, if not before, to 6 August 2013, in which period the director paid £52,466 to his benefit, leading to a liability owed to GEP of £7,886

  • he allowed GEP to receive £666,000 of investor monies in breach of financial regulations, and to fail to apply those monies as required by contract, to the investors’ detriment

The terms and conditions of investor debentures included the following commitment from GEP: “The Company will place all stove funds in a separate bank escrow account for the sole use of purchasing Cook stoves”. No such account was created, only £32,395 was paid in respect of cookstoves before 31 July 2013, only 1,449 stoves were ever obtained, and on 31 July 2013 there was only £101,087 cash remaining. In comparison, the marketing agents employed to introduce the investors charged £324,200.

The company solicitors gave consistent advice in meetings, phone conversations and emails from 11 December 2012 until 11 June 2013 that:

  • under s21 Financial Services and Markets Act 2000 (“FSMA”), GEP was prevented from “communicating an invitation or inducement to engage in investment activity”

  • that the marketing material it produced should be signed off by persons authorised under FSMA and

  • that, should the authorised person recommend it, this could lead to the need to offer refunds to existing lenders

  • no such authorised sign off, or specialist advice, was obtained

  • Mr Cooney abrogated his responsibilities as director of Global Eco Projects Ltd (“GEP”) from 11 December 2012 to 31 July 2013. As a consequence:

  • he allowed a disqualified director to control company banking from 25 February 2013, if not before, to 6 August 2013 and, from 1 April 2014, that director paid £52,466 to his benefit, leading to a liability owed to GEP of £7,886

  • he allowed GEP to receive £613,000 of investor monies from 11 December 2012 to 31 July 2013, in breach of financial regulations, and to fail to apply those monies as required by contract, to the investors’ detriment

The terms and conditions of investor debentures included the following commitment from GEP: “The Company will place all stove funds in a separate bank escrow account for the sole use of purchasing Cook stoves”. No such account was created, only £32,395 was paid in respect of cookstoves before 31 July 2013, only 1,449 stoves were ever obtained, and on 31 July 2013 there was only £101,087 cash remaining. In comparison, the marketing agents employed to introduce the above investors charged £297,700 for clients referred from 11 December 2012 to 31 July 2013, of which £43,000 was in respect of a company of which Mr Cooney was a director.

The company solicitors gave consistent advice in meetings, phone conversations and emails from 11 December 2012 until 11 June 2013 that:

  • under s21 Financial Services and Markets Act 2000 (“FSMA”), GEP was prevented from “communicating an invitation or inducement to engage in investment activity”

  • that the marketing material it produced should be signed off by persons authorised under FSMA and

  • that, should the authorised person recommend it, this could lead to the need to offer refunds to existing lenders

  • No such authorised sign off, or specialist advice, was obtained

Mr Childs and Mr Cooney caused GEP to accept £140,500 from investors from 1 August 2013 to 7 February 2014 to their unreasonable risk and ultimate detriment, after they knew, or ought to have known, that GEP was both insolvent and in breach of financial regulations:

  • the company accountants provided draft 31 March 2013 accounts to GEP on 14 May 2013, which set out trading losses and net liabilities of £259,728

  • the company solicitors had given consistent advice that GEP was prevented by FSMA from “communicating an invitation or inducement to engage in investment activity”, and the company had not followed their advice to seek authorised sign-off of its marketing material and specialist advice as to whether it had to offer refunds to existing lenders, which totalled £666,000 by 1 August 2013

  • GEP had disposed of at least £564,914 of prior investor deposits of £666,000 in breach of the terms and conditions of investor debentures “The Company will place all stove funds in a separate bank escrow account for the sole use of purchasing Cook stoves”. No such account was created and only £32,395 was paid in respect of cookstoves before 31 July 2013

  • in comparison, the marketing agents employed to introduce these investors charged £60,300

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 can be found here.

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.

Contact Press Office

Media enquiries for this press release – 020 7674 6910 or 020 7596 6187

Press Office

The Insolvency Service

4 Abbey Orchard Street
London
SW1P 2HT

This service is for journalists only. For any other queries, please contact the Insolvency Enquiry line on 0300 678 0015.

For all media enquiries outside normal working hours, please contact the Department for Business, Energy and Industrial Strategy Press Office on 020 7215 1000.

You can also follow the Insolvency Service on:

Published 27 July 2016