Back in November, we reported on two earth metals companies that were selling virtually worthless earth metals to unsuspecting investors. The companies involved, ‘Denver Trading AG’ and ‘Denver Trading Ltd’, were subsequently wound up for “offering services which were simply designed to fleece vulnerable investors”.

On 21 January 2015, an escrow service provider which performed payment services for the two companies was wound up by the High Court following an Insolvency Service investigation.

Punished for its part in the scam

Imperial Escrow Ltd provided an escrow facility (a service which is supposed to be independent and neutral to protect all parties involved in a transaction) to a very select group of clients, two of which were Denver Trading AG and Denver Trading Ltd.

The Denver companies, which sold rare earth metal oxide to members of the public as an investment, used Imperial Escrow Ltd to bank their customer remittances. On collection of the remittances, transfers were made to the sales agents of the Denver companies, usually representing 40 to 50 percent of the customers’ fees.

The remaining balance was then paid by the escrow company to offshore bank accounts controlled by the Denver companies’ directors, Tobias Alexander Ridpath and Christopher John Sabin.

All three companies were placed in provision liquidation

On 19 December 2013, both Denver companies and Imperial Escrow Ltd were placed into provisional liquidation by the High Court following winding up petitions presented by the Secretary of State.

At this time, Imperial Escrow Ltd held £1.1million in escrow accounts on behalf of the Denver companies. Rizvan Mian, the sole director of the escrow provider, claimed he had acted on the instructions of Mr Ridpath and Mr Sabin, and that the money it held belonged to those companies.

At this time, the court was sufficiently concerned that the monies were at considerable risk if Imperial Escrow was allowed to continue trading. The Register said it was essential that client funds were dealt with properly after investigation by the Official Receiver. As such, the company was ordered into provisional liquidation, transferring control of the company’s assets, including its bank accounts, to the official receiver.

The Denver companies were wound up compulsorily on 27 August 2014. The Insolvency Service investigation found that serious misrepresentations had been made to members of the public as to the investment returns they could expect from earth metal oxides. Sales agents for the companies were authorised to sell the metals for prices that were 300 to 500 percent more than the Denver companies had paid. In practice however, the elements were commonly sold to members of the public for a 625 percent mark up.

Welcoming the court’s decision to wind up Imperial Escrow Ltd and draw a line under the case, David Hill, a chief investigator with the Insolvency Service, said: “This formally brings to an end the activities of this company, linked to companies that, in truth were pedalling near worthless investments.

“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”.

If you are being threatened with a winding up petition threat call 08000 746 757 to speak to someone who can help.

Written by: Mike Smith