Nine Leeds-based companies operating a ‘rescue’ scheme for victims of land banking scams have been wound up in the High Court following an investigation by the Companies Investigations, part of the Insolvency Service.
The companies marketed a scheme to ‘recover’ some value for the plot holders of an unconnected illegal land banking scam run previously by English Land Partnership and then later by London Land and Property Exchange Ltd.
The companies concerned are: Recoverykingshill Ltd, Recoverylittlemilton Ltd, Recoveryweybridge Ltd, Recoverysaunderton Ltd, Recoverykensworth Ltd, Recoveryscholes Ltd, Recoverycookridge Ltd, Recoverywombourne Ltd and Recoverymilford Ltd.
The companies were formed between October 2007 and October 2010 and operated from the same address. Each company targeted the plot holders of a specific site, who were invited to subscribe for shares to fund the companies’ objectives, including seeking planning permission and the resale of the land to developers.
Investigations found that the majority of shareholder funds had been withdrawn by the director in the form of salary payments. Investigators also established that the investing shareholders were not in a position to influence the director’s activities by virtue of the fact that their shares, unlike the director’s, carried no voting rights.
Further, the investigators found that the director, who was not a plot holder or an investor, had also benefitted by charging six of the companies an identical fee for conducting the same piece of research.
Largely as a result of these payments, which totalled almost £150,000, the investigators found that the companies had little of their original capital remaining and were in a position where they were incapable of incurring the costs necessary for them to achieve their aims.