Eco Business Management Limited, a company selling carbon credits to the public for investment, has been ordered into liquidation for misleading potential investors via a winding up petition. The compulsory liquidation was ordered against the London and Stockholm based firm, commencing 4 March 2015.
The liquidation in the High Court followed a winding-up petition presented by the Secretary of State for Business, Innovation and Skills. This followed a detailed and confidential inquiry by Company Investigations, operating as part of the Insolvency Service. The petition was unopposed.
The investigation’s findings
Through the course of the Insolvency Service’s investigation, it became apparent that Eco Business Management Ltd was involved in the mis-selling of carbon credits to the public for investment purposes.
The investigation revealed that prospective investors were subjected to high pressure sales tactics and techniques, as well as misleading statements designed to coerce customers into paying inflated prices of up to £11.95 per credit. In some instances, the credits were cancelled after their purchase without the investors’ knowledge or consent.
The court heard that investors were told they could expect to receive a return of up to 82 percent within the first 6 to 24 months of making their investment. They were also misled into believing Eco Business Management had companies lined up to buy credits from the investors to help them realise the promised gains. When customers contacted the company to enquire about their investment, they were falsely told it had entered into liquidation.
A carefree company director
According to a Mr Aaron Whiteman, one of the individuals involved in acquiring the company registration in October 2011, the company did not trade, have a bank account or keep any employee records. Instead, he claimed that he had ‘handed over’ the company to a broker company whose name he could not recall. He also could not remember who he had dealt with at the broker company, or their contact details.
When asked what he thought would happen as a result of the company liquidation, Mr Whiteman replied that he “did not give a s*** as he was now doing other things”.
Dormant accounts and false claims
For the period during which Eco Business Management Limited was clearly trading, the company filed dormant reports and made claims that it was a “sophisticated international business”, which was “covered” by the Financial Conduct Authority (FCA); however, it quickly became clear it was not.
In its marketing materials, the company also claimed to be an organisation that treasured its role as a leader in the carbon finance industry, but in reality the company was no more than a scam designed to fleece investors of their savings.
Abandonment and objectionable trading practices
Welcoming the court’s decision to wind up the company and place it in compulsory liquidation, Chris Mayhew, the Company Investigations supervisor, said: “I would once more urge potential investors not to respond to cold calling manipulative and deceitful investment sharks out there to make ‘easy money’ from you.
“The Insolvency Service will not allow rogue companies to rip-off vulnerable and honest people and will investigate abuses and close down companies if they are found to be operating, or about to operate, against the public interest.
“The grounds to wind-up the company were its objectionable trading practices, abandonment, lack of transparency and lack of co-operation with the investigation and breach of the Companies Act 2006.”
The Director responsible in this case acted irresponsibly and may well find himself with further action taken against him. You must place creditor’s interests before your own and the attitude of the director in particular will not have gone down well with the Insolvency Service.
Any winding up petition threat must be taken seriously as there is no threat greater to a trading company. If you have received a threat of winding up then call 08000 746 757 to get free fast professional insolvency advice.