Anthony Allen, aged 31, the director of Global Neutral Ltd (Global Neutral), has received the maximum disqualification preventing him acting as a director for 15 years. An Insolvency Service investigation found that under Mr Allen’s sole control, Global Neutral used misleading sales practices to take more than £1.1 million from members of the public between April and September 2012 to buy Voluntary Emission Reduction carbon credit units (VERs) as investments. There is no genuine market for VERs that is accessible to the public to resell their units. In the unlikely event they could have been sold, the units had been marked up so much over cost price by Global Neutral that customers would not be able to make a profit.
This disqualification follows investigation by the Official Receiver at Public Interest Unit, a specialist team of the Insolvency Service. The Official Receiver’s involvement on the winding up of the company in the public interest and followed an investigation into the affairs of the company by Company Investigations, another team within the Insolvency Service.
The Official Receiver’s investigation uncovered that Global Neutral was the successor to World Future Ltd, another company that was investigated and wound up in the public interest for its misleading sales of VERs as investments.
Apart from working as a junior salesman for 8 months at World Future, Anthony Allen had no knowledge or experience of the carbon market when he set up Global Neutral and took on at least 12 of World Future’s sales staff without interview.
Mr Allen claimed: “The carbon credits were not sold as an investment, as I don’t believe it was an investment. Some customers believed it was, not due to anything we said”. However, sales scripts recovered from the trading premises and information from customers make it clear that the sales people repeatedly misled customers by referring to high returns that customers would allegedly make.
Paul Titherington, Official Receiver at Public Interest Unit, said:
The company persuaded members of the public to part with substantial sums by falsely claiming that customers would be able to easily sell the units and make large profits. In reality there was no market to sell their units, and so the customers have lost all the money they believed they were investing. The misleading scheme operated only for the benefit of those running the company.
As is so often the case, if an investment scheme appears too good to be true, it probably is.
Notes to editors
Anthony Allen is of Chigwell, Essex and his date of birth is 19 April 1985.
Global Neutral Ltd was incorporated in the name Complete Campaign Ltd with registered number 07084894 on 24 November 2009 by a formation agent. It remained dormant until acquired by Anthony Allen in February 2012, when its name was changed to Global Neutral Ltd.
Global Neutral Ltd’s registered office was at Level 18, 40 Bank Street, Canary Wharf, London E14 5NR. Anthony Allen was the only director and shareholder throughout the company’s life after acquisition from the formation agent. The company traded from a serviced office at 5 Harbour Exchange, South Quay, London E14 9GE
VERs are fundamentally different from the licences to pollute [“CERs”] that can be readily traded in the compliance carbon market established under the Kyoto protocol. VERs are intended to be “retired” by businesses or individuals to offset their carbon footprints. Unlike with CERs, there is no readily accessible market where customers can sell on their VERs in the hope of being able to make a profit. Taken together with the mark-ups of between 107% and 195% over cost price applied by Global Neutral, this means that investors will be unable to sell their VERs for a profit, or probably at all, and will suffer financial loss accordingly.
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.
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