LCG-London Capital Group Limited (LCG), approached distressed companies, to include those who were subject to winding up petitions presented by creditors, on the premise that it was able to find a purchaser for the company by way of a share sale agreement. In return the company took a fee for this service, with the fees varying depending on what the company felt it could readily extract from the distressed company.
The given purchaser companies were Slovakian registered, with their directors being Mexican nationals and resident in that country. The effect of those purchases was negligible in all known cases, with those client companies all ending up in compulsory liquidation shortly after purported takeover. After that time the new owners failed to deliver up book and records, assets have not been accounted for and the new owner companies and their directors have failed to cooperate with the Official Receiver in the liquidation process.
LCG’s appointed directors since its incorporation have been Vladimir Pavelcik and Jose Luis Lopez, a Mexican national and resident.
The sales process and representations made in that process were not genuine, the effect being that the process was a device to extract fees based on misleading claims, including a claim that directors at the time of pre-sale would be free from having to account for their actions in the event of any insolvency proceedings.
As set out in the Court’s findings, including those set out below, the company’s processes appeared to be designed in such a way as to deliberately undermine the insolvency regime, in particular the functions of the Insolvency Service to be able to ascertain the assets and liabilities of companies in liquidation, and to investigate the conduct of those responsible for managing those companies.
The winding up hearing was heard at Manchester District Registry Court, before Registrar Khan. Registrar Khan found that:
the company made deliberately misleading statements to the public, and that he was satisfied that those involved in the company had been deliberately obstructive and failed to cooperate with the investigation
the company traded with a lack of commercial probity in that it offered services which undermined the Insolvency regime
Notes to Editors:
LCG-London Capital Group Limited, registration no. 09158458, has its registered office at Salisbury House, London Wall, London, EC2M 5QQ, where a virtual office facility was being provided to LCG.
The petition to wind up the company was presented in the High Court on 9 September 2016, 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 order 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: firstname.lastname@example.org.
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, Energy & Industrial Strategy (BEIS).
Further information about live company investigations is available.
The Insolvency Service, an executive agency sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), administers the insolvency regime, and aims to deliver and promote a range of investigation and enforcement activities both civil and criminal in nature, to support fair and open markets. We do this by effectively enforcing the statutory company and insolvency regimes, maintaining public confidence in those regimes and reducing the harm caused to victims of fraudulent activity and to the business community, including dealing with the disqualification of directors in corporate failures.
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