The company acted as trustee of the Westminster Pension Scheme (‘the Scheme’) which was established in December 2012. Clients were induced to move their existing pension funds into the Scheme on the basis that they would receive in return a cash payment either in the form of a ‘loan’ from an associated company (typically of 50% of the funds) or from commission on investments made by Thames Trustees Ltd on behalf of the Scheme. In fact, there was never any intention that the loans received by clients would be repaid and the Scheme, instead, operated as a pension liberation scheme providing clients with earlier access to pension funds than is permitted by the Finance Act 2004.
The investigation established that 79 members joined the Scheme and invested an aggregate of £3,333,665 by transferring their existing pension scheme investments into it.
The Court found that the company had operated with a lack of transparency and a lack of commercial probity. In particular:
- The recorded directors of the company had no knowledge of the activities of the company and / or the investment of the monies received by the company on behalf of the Scheme.
- Those in actual control of the company gave conflicting explanations about their roles. They received significant commission payments which were deducted from the funds transferred into the Scheme by clients, without the prior knowledge of those clients.
- The investments made with the Scheme funds were not made for a true commercial purpose; there were significant discrepancies in the documentation associated with the investments; some of the investments were in an unregulated collective investment scheme suitable only for sophisticated investors able to understand and bear the high risks involved, and not suitable for the clients recruited by the company; and some investments were in an unsuccessful land development in Florida. The investigation found no meaningful evidence to suggest that there was any value whatsoever in the investments undertaken by or on behalf of the Scheme.
Commenting on the case, Colin Cronin, Investigation Supervisor with the Insolvency Service, said,
The structure of this pension liberation scheme was deliberately opaque and the lack of transparency was added to by the failure of those in control of the company to fully cooperate with the investigation.
The operation of the scheme was highly prejudicial to the clients who were required to invest their pension funds into it in order to obtain the early release of part of those funds. The balance of funds were not legitimately invested as clients were led to believe. These proceedings show that the Insolvency Service will take firm action against companies which mislead the public in this way.
Notes to editors
Thames Trustees Ltd – company registration number 08162989 - was incorporated on 31 July 2012. Other than the address of the formation agents, the company has had its registered office at 111 Buckingham Place Road, Victoria, London SW1W 0SR (13 November 2012 to 3 March 20915) and thereafter at 1 Navigation Business Village, Navigation Way, Ashton On Ribble, Preston PR2 2YP.
The petition to wind-up Thames Trustees Ltd was presented under s124A of the Insolvency Act 1986 on 3 May 2016. The company was wound up on 11 July 2016 and the Official Receiver has been appointed as liquidator.
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.
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By virtue of the appointment of the Official Receiver all public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit, 2nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Tel: 0161 234 8531 Email: firstname.lastname@example.org
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