Panama and Peru-registered ‘gold mining’ companies shut down
Following an Insolvency Service investigation three companies, which collectively offered and administered the selling of partnerships in a gold mining project, were wound up.
The companies, wound up by the High Court on 16 December 2015, were Continental Mining Opportunities S.A. (CMO SA), a company registered in Panama, and Montana Leon S.A., a company registered in Peru, along with the UK registered CMO Administration Ltd.
CMO SA sold partnerships in a limited partnership that it controlled and managed, the UK registered Montana Leon LP (Registration Number LP016073), to members of the public via a network of sales brokers. A list of those known brokers is set out below.
The investigation found CMO SA and its sales agents sold partnerships in Montana Leon LP on the basis that the latter owned 30% of a gold mining joint venture in Peru, at a location referred to as the El Leon mine in the Chappara region of Peru. The company failed to provide the investigators with any evidence that Montana Leon LP or any associated companies had any genuine leasehold or ownership rights, let alone any plant and machinery or Government permissions to be able to undertake any mining operations. Investors in the scheme were reassured that logistical work at the site was underway, being provided with Facebook feeds and news updates disclosing photographs and videos of supposed activity at the mine.
The Financial Conduct Authority (FCA) conducted an investigation into CMO SA, Montana Leon LP and CMO Administration Ltd in early 2015 and as a result, sought and obtained undertakings from the following:
Gary Potter – common manager across all the companies and former appointed director of CMO Administration Ltd
Aldo Ernesto Atherley-White – former appointed director of CMO Administration Ltd
Armand Kailitch – appointed director of CMO Administration Ltd
The undertaking means the above persons variously agreed to cease to market and promote the sale of partnerships in Montana Leon LP, to cease operations and seek to liquidate Montana Leon LP.
The FCA posted an alert on its website warning that it considered Montana Leon LP to be an unauthorised collective investment scheme, and that those parties who ran Montana Leon LP were also acting on behalf of unauthorised companies, CMO SA and Montana Leon SA, and that they were believed to be in the process of moving operations to a non-UK limited partnership.
Those behind the gold mining scheme have attempted to circumvent the FCA warning and their undertakings by trading through a successor company to CMO SA, being Montana Leon SA, registered in Peru. Montana Leon SA has continued to seek investments from those UK based investors in Montana Leon LP, and at the same time, CMO SA have sought and obtained fees from Montana Leon LP partners to ostensibly transfer their limited partnerships to an undisclosed entity claimed to be registered in Panama.
Partners were informed to expect 12% per annum returns over the six year term of the claimed mining concession. Whilst some investors had been paid minor returns in early 2015 it is not known from what revenue source those returns had been paid. Those payments could not have been from any mining operations as the scheme companies set out in circulars to investors that mining operations were not due to commence until at least June 2015, a start date that has since been moved back.
CMO SA and Montana Leon LP failed to co-operate with enquiries. Information obtained from other sources showed that CMO SA had received over £1.5 million from over 130 partner investors in a six month period. The investigators found no evidence of the application of funding into any mining operations. The majority of monies from investors had actually been dispersed as sales commissions to brokers and introductory agents.
The gold mining scheme companies had used the following sales brokers amongst others to sell LP partnerships, none of whom were, or are, FCA authorised:
Thornblack Limited trading as Thorn Black International – company registration number 08576804. The company was placed into voluntary liquidation in January 2015. The FCA published an alert against that company on its website warning that the company had been providing financial products and services without being authorised
Global Commodity Solutions
Alexander George Limited, company registration number 09112314
Alternative Innovations Limited, company registration number 09178717
360 Capital Management Limited trading as 360 Capital Markets. The FCA have posted a warning on their website that the company had been providing financial products and services without being authorised
Welcoming the Court’s decisions Irshard Mohammed, a Senior Investigator with the Insolvency Service, said:
Thanks to the hard work of investigators, this operation has been effectively curtailed but I would urge investors to be diligent when faced with seemingly tempting investment opportunities.
The Insolvency Service will act whenever serious failings are discovered and ‘close the lid’ on unscrupulous companies to prevent them from inflicting misery on ordinary people.
Notes to Editors
CMO SA is a company registered in Panama, registration number 801959. The registered address of the company is 2nd Floor, Humboldt Tower East, 53rd Street, Urb. Marbella, PO Box 0189-09132, Panama City, Panama.
Montana Leon SA is registered in Peru, registration number RUC20600090136 and registered address at Avenue Jerusalen 115, Arequipa, Peru.
CMO Administration Ltd, registration number 08904872, has its registered office at a Regus managed location, Portland House, Bessenden Place, Victoria, London, SW1E 5RS. The company was locked out of those premises in March 2015.
The petitions to wind up the companies were presented in the High Court on 23 October 2015, under the provisions of section 124A of the Insolvency Act 1986 following confidential enquiries by Company Investigations under section 447 of the Companies Act 1985, as amended.
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
Telephone: 0207 637 1110
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).
Further information about live company investigations is available 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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Published: 17 May 2016
From: The Insolvency Service