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Court orders unscrupulous land banking company into liquidation

News Release issued by the COI News Distribution Service on 05 April 2012

Century Property Group Ltd, formerly Century Land Group Limited, has been ordered into liquidation in the High Court on grounds of public interest following an investigation by Company Investigations (CI) of the Insolvency Service.

The company traded from Tower 42 building in the City of London marketing plots of land for sale to the public as an investment opportunity.

The investigation found that the company made exaggerated and misleading claims regarding the investment potential of the land and that investors were misled into believing that the plots they were buying had serious development potential when, in fact, there was no credible evidence to support the assertions made to investors.

The investigation uncovered that 225 plots had been mis-sold to the public on at least ten separate sites raising over £2.6 million.

A further 3 sites have since been identified and in all around £10 million has been raised from the public including one case where a family invested £600,000.

The company was closed down on 18 August 2011 as a result of the Service’s actions (see note 4 below).

Company Investigations Supervisor Chris Mayhew said:

“Unscrupulous land banking companies who target vulnerable people, especially through cold calling, and persuade them to invest in land at exaggerated prices are peddling the myth of easy money and ruining lives.

“I would urge anyone who receives a call from an unknown source asking them to part with money or information to question it, take time to reflect and seek independent advice.

“Don’t be afraid to say no thank you: If a scheme sounds too good to be true, it usually is. Not one of the land banking companies we have investigated and wound up has seen a profit for the investor.

“Indeed in one liquidation case being handled by the Official Receiver he was advised the cost of obtaining a professional valuation of the land in question would cost more than the value of the land itself”.

Ends

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Notes to Editors

Century Property Group Ltd was incorporated as a private company on 17 October 2008. It changed its name from Century Land Group Limited on 6 April 2011. The registered office of the company was formerly c/o Alexanders, Redhill Chambers, High Street, Redhill, Surrey, RH1 1RJ.

The recorded directors of the company have been Mr Jan Maarten Bogaerts (from incorporation to 16 April 2009) and Mr Stephen John Wheeler (from 16 April 2009 to date). The company secretary from incorporation to 16 April 2009 was Aspen Global Incorporations Limited in Hong Kong. The secretary thereafter was Mr Wheeler.

The land marketed by the company was at 13 sites, namely Keston, near Bromley, Kent; Brightwell-cum-Sotwell, Oxfordshire; Balsall Common, near Coventry; Stratford-upon-Avon, Warwickshire; High Halden, near Ashford, Kent; Colchester, Essex; Beningbrough, North Yorkshire; and more recently at Flax Lane, Burscough, West Lancashire; Chessington, Surrey; Mattishall, Norfolk; Burnley; West Cheshunt, and Bridgewater, Somerset.

The petition to wind up the company on grounds of public interest was presented on 9 August 2011 under the provisions of section 124A of the Insolvency Act 1986. On the application of the Secretary of State the Official Receiver was appointed provisional liquidator of the company on 18 August 2011 – see news release “High Court orders closure of Century Property Group Ltd” issued on 25 August 2011.

The petition was presented following confidential enquiries carried out by Company Investigations, part of the Insolvency Service, under section 447 of the Companies Act 1985, as amended.

The grounds for winding up the company were its lack of commercial probity, lack of transparency and/or improper diversion of company funds, failure to keep or deliver up proper accounting records and failure to co-operate with the investigation.

In ordering the company into liquidation on 4 April 2012 Ms Registrar Barber commented that this case had all the hallmarks of what is now known in these Courts as a ‘classic land banking business’ adding:

“This is the petition of the Secretary of State presented on 9 August 2011 seeking to wind up the company in the public interest. On the Secretary of State’s application the Official Receiver was appointed provisional liquidator of the company by Mr Justice Floyd on 18 August 2011. Initially the company indicated an intent to contest the winding up and directions were given for the filing of further evidence and for the matter to be adjourned to a Judge for a contested trial. Once this written evidence was closed, including a damning statement in reply on behalf of the Secretary of State, the company through its solicitors confirmed that the company no longer wished to oppose the winding up action. The matter now comes on before me for uncontested disposal. It is against this backdrop that the Secretary of State says that the company should be wound up as it operated a land banking business selling small plots of land for investment at highly inflated prices to the public. The winding up grounds relied upon are as follow: Firstly, lack of commercial probity; secondly lack of transparency and/or improper diversion of company funds; I should pause here to say that Mr Caddick QC clarified this ground to some extent by conceding that the reference to lack of transparency is reduced to the lack of transparency as regards the lack of documentation to fully explain payments to and from Aspen and Supracorp, Mr Bogaerts’ Hong Kong companies, and the use of Mr Wheeler’s merchant service facility to receive credit card payments from investors. If the matter had proceeded to trial with cross examination there might well have been a finding that company funds had been improperly diverted, but without this I am unable to find that this is so. The third ground relied upon is failure to keep or deliver up proper accounting records and fourthly, failure to co-operate with the investigation. On the evidence before me, which is uncontested, I am satisfied that each of the four grounds is made out, albeit on the caveat that as regards the second ground, it is the first of the two limbs that is made out, namely its overall dealings and transactions. Mr Caddick QC rightly conceded that a finding of diversion of funds could not be made. There are numerous examples of payments out in favour of third parties that have not been properly documented or vouched. I will confine myself therefore to the first limb. I am fully satisfied that it is in the public interest that this company be wound up on grounds of public interest and I do so order.”

Public interest winding up action has now been taken against over 60 land banking companies, some connected, and others not, that between them have raised over £40 million from the public – see News Release issued on 19 October 2011 “Landbanking – from Insolvency Service”.

Company Investigations, part of the Insolvency Service, carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation & Skills (BIS).

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 http://www.bis.gov.uk/insolvency

All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit , 21 Bloomsbury Street, London, WC1B 3QW Telephone: 020 7637 1110 Email: piu.or@insolvency.gsi.gov.uk

Media enquiries should be directed to:

Kathryn Montague, Media Relations Manager, Telephone 020 7596 7674 or Ade Daramy, Press Officer on 020 7596 6187

Contacts:

Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk