Insolvency Service
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Two landbanking companies buried after government investigation

Two landbanking companies buried after government investigation

News Release issued by the COI News Distribution Service on 03 November 2011

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

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