Insolvency Service
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Two landbanking companies buried after government investigation
Two companies have become the latest in a string of companies wound-up following an investigation by The Insolvency Service for landbanking activities. As well as selling worthless land, the companies even attempted to sell land they did not own.
Regency Land Sales Ltd and Regency Land Group Limited IBC, based
in London, Spain and Belize were both wound up in the High Court
following an investigation by the Government's Companies
Investigations, part of The Insolvency Service.
The investigation found Regency Land Group Limited, formed in
Belize and operated from offices in Spain, used telesales methods
to sell small plots of agricultural land in Grantham to members of
the public. The company misleadingly suggested the land would
'accrue further value when it was rezoned for planning
purposes'. In reality, enquiries made of the local
authority by Investigators have confirmed there is no real
prospect of such rezoning taking place. Regency Land Sales Ltd, an
England & Wales registered company, acted as UK sales
agent for its offshore relation.
The investigation followed on from an earlier enquiry into
Britannia Land Management Limited, which also sold land in
Grantham and which identified similar concerns over the activities
of that company, resulting in it being wound up by the High Court
in the public interest on 18 October 2010.
Both Britannia and
the Regency companies have been managed by Llewellyn Adam
Hannah-Shelton, a UK citizen resident in Spain.
During the investigation, Mr Hannah-Shelton and others said
to be in control of the two companies failed to co-operate with
Investigators and did not provide full information regarding their
affairs. Nevertheless, the investigators were able to establish
that the land sold to the public was never legally transferred
into their names and that whilst purchasers were given a
"guarantee" of 8% growth on their investment in
the first 12 months, this was entirely illusory.
Investigators also found that there was also a lack of
transparency about the management and status of Regency Land Group
Limited as a Belize registered company with only very limited
disclosure of its details. In addition, those in control of the
companies admitted to the use of aliases when talking to the
clients, and to using virtual offices and internet based mail
scanning services.
On 7 September 2011, the Secretary of State for Business
Innovation and Skills successfully applied to the High Court to
have the Official Receiver appointed as Provisional Liquidator of
both companies. The role of the provisional liquidator was to
protect assets in the possession or under the control of the
company pending the determination of the petition.
Ends Ins/Coms/195 Notes to editors
1. Regency Land Sales Ltd was incorporated on 07 October
2010. Its registered office is at Suite 11, Penhurst House,
352-356 Battersea Park Road, London SW11 3BY. Regency Land Group
Limited is an International Business Company registered in Belize
under license number 97616 and its given address in Belize is 60
Market Square, Belize City with a registration date of 20
September 2010. There is no further publically available
information given the status of such a company as an offshore tax
haven entity.
2. The petitions were presented under s124A of the Insolvency
Act 1986 on 01 September 2011 and the Winding-up Orders were made
on 01 November 2011.
3. The Insolvency Service carries out confidential enquiries
on behalf of the of the Secretary of State for Business,
Innovation and Skills through Companies Investigation.
4. 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. The Service also 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. Further information about the work of The Insolvency
Service is available from www.bis.gov.uk/insolvency.
5. The Insolvency Service recently issued a warning to the
public alerting them to the unscrupulous practice of landbanking
as figures indicate that these scams are on the increase. Since
2007 Company Investigations, part of The Insolvency Service, has
closed down 49 landbanking companies in England and Wales that
have collectively caused the public to lose over £30 million.
Since 2009, 39 companies have been wound up that caused losses of £13.4million.
6. Landbanking involves a plot of land - often green or brown
belt - being bought by "developers" and then
being sub-divided into a number of smaller plots which are then
marketed, often under the false pretext that planning permission
will be granted for development.
7. The Insolvency Service has seen a 33 per cent increase in
the number of complaints it has received (2009-2011) against
companies involved in these scams and a 100 per cent increase over
two years in the number of complaints about landbanking scams
accepted for investigation. To date, nine directors of landbanking
companies have been disqualified by The Insolvency Service for a
total of 86 years. It is estimated that total losses from all
landbanking scams exceed £200million nationwide.
8. Landbanking scams first emerged in the UK several years
ago, but in the last three years, The Insolvency Service has
witnessed an increasing amount of activity in this area and an
increase in the number of complaints it has accepted for
investigation.
* 7 cases accepted for investigation in 2009;
* 11 cases
in 2010;
* 16 cases to date in 2011.
9. Analysis of a sample of 35 landbanking
'victims' from four scams closed down by The
Insolvency Service's actions (from June 2009 to the
present), shows the typical profile of a victim to be - 67% aged
over 50 years-old, with nearly half (44%) being over 60 years-old.
The oldest investor was 85 years-old. More males appear to have
typically fallen victim to landbanking scams, with this sample
showing 60% as male. Visit the landbanking page on our website for
more information.
10. All public enquiries concerning the affairs of the
companies 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:
piu.north@insolvency.gsi.gov.uk.
11. Media enquiries should be directed to: Ade Daramy, Press
Officer, on 020 7596 6187 or Lorna Dennis on 020 7637 6279.
Contacts:
Insolvency Service
nds.insolvencyservice@coi.gsi.gov.uk
Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk