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Court orders three more Essex-based landbanking companies into liquidation

News Release issued by the COI News Distribution Service on 21 December 2011

Three companies in Essex that mis-sold undeveloped land for investment to the public have 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 investigation found that Theydon Land Developments Limited, Emerging Property Partnership Limited (See Note 8) and Franklin Knight Ltd had mis-sold small, residential-sized plots of undeveloped land at sites in Theydon Bois, Essex to the public.

The investigation found that the three companies were linked to 11 other landbanking companies which had already been wound up; six of these companies were wound up in June 2011 (see Note 5 below) and five in March 2010 (see Note 6).

Theydon Land Developments Limited bought two sites in Theydon Bois in March and August 2010 for £68,000. The company then sold 66 plots to investors for £388,452,between March 2011 and April 2011 through its agents, including Franklin Knight Ltd (see Note 4).

Emerging Property Partnership Limited sold plots at a site in Theydon Bois prior to being struck off the Register of Companies and dissolved on 19 October 2010.

The director of Franklin Knight Ltd was Miss Manjit Kaur Minhas who had also been the director of Alpha Capital Investments (London) Limited, one of the land banking companies already wound up (see Note 5).

Commenting on the case Company Investigations Supervisor Chris Mayhew said:

“It is appalling that unscrupulous land banking operators are continuing to prey on innocent members of the public and must be stopped. Our message to these crooks is quite a clear: we will investigate you and close you down”.

Ends

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Notes to Editors

1. Theydon Land Developments Limited was incorporated on 19 November 2009. The registered office of the company was at High Wood, Newbiggen Street, Thaxted, Dunmow, Essex, CM6 2QT. The sole recorded director of the company was Mr Craig White. There was no recorded company secretary.

2. Emerging Property Partnership Limited was incorporated on 8 July 2008. The registered office of the company was at High Wood, Newbiggen Street, Thaxted, Dunmow, Essex, CM6 2QT. The company was dissolved on 19 October 2010. The sole recorded director was Mr Leonard Paul Steyne. There was no recorded company secretary.

3. Franklin Knight Ltd was incorporated on 9 March 2010 in the name Franklin Night Ltd. The name of the company was changed to its present style on 16 March 2010. The sole recorded director of the company was Miss Manjit Kaur Minhas. There was no recorded company secretary.

4. Theydon Land Developments Limited’s sales agents were Franklin Knight Limited, Castra Land Limited (which entered into voluntary liquidation on 14 February 2011 with a reported deficiency of £37,730) and Alpha Capital Investments (London) Limited.

5. Alpha Capital Investments (London) Limited (together with 5 other associated companies) was ordered into liquidation on grounds of public interest on 29 June 2011, one of the grounds being the making of misleading and unfounded representations – see news release “High Court orders six unscrupulous land banking companies to close” issued on 1 July 2011.

6. These companies were linked to other landbanking companies wound up on 31 March 2010 – see news release “High Court orders five land banking companies into liquidation” issued on 2 April 2010. [Four individuals have since been charged with conspiracy to defraud for their involvement with these companies, Mr Omar Eshpari, Mr Dean Straker, Mr Stephan Mitchell and Mr Derail White – see City of London Police news release “First UK criminal charges for land banking fraud” issued on 17 June 2011]

7. The petitions to wind up the present companies (and to restore Emerging Property Partnership Limited to the Register and wind up on grounds of public interest) were presented on 1 October 2011 under the provisions of section 124A of the Insolvency Act 1986.

8. Theydon Land Developments Limited purchased two adjacent sites and, together with its sales agent Franklin Knight Ltd sold at least 66 plots of land to investors raising some £388,452. The grounds for winding up the companies were:

· Emerging Property Partnership Limited and Theydon Land Developments Limited carried on business with a lack of commercial probity; and,

· Franklin Knight Ltd failured to file returns and closed down without a formal process.

9. In ordering the companies into liquidation on grounds of public interest on 14 December 2011 Mr Registrar Baister said:

“All of the companies were engaged in what is now commonly known as land banking. The Secretary of State’s allegations are made out in that misleading and unfounded statements were made to induce people to purchase plots of land on the basis that the land being sold represented a good investment because of the likelihood of the land receiving planning permission for residential development and the resulting significant increase in its value whereas in fact, as is always the case in these sorts of cases, the chances are very unlikely of the land receiving planning permission. The land was phenomenally over stated in value and in one case the local authority went so far as to issue a warning about the company’s business. This would of itself be sufficient to wind up in the public interest. In the case of Franklin Knight Ltd, the Annual Return is 21 months overdue and in all the circumstances before me I am satisfied that Emerging Property Partnership Limited should be restored to the Register and that all three companies be ordered into liquidation on grounds of public interest”.

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

11. The Service recently issued a warning to the public alerting them to the unscrupulous practices of land banking as figures indicate that these scams are on the increase – see news release “Unscrupulous land banking companies on the increase” issued on 19 October 2011.

12. The Solicitors Regulation Authority has issued an update on the position of solicitors in relation to landbanking cases and the position taken by the Solicitors Disciplinary Tribunal:

http://www.sra.org.uk/sra/news/sra-update/issue-22-case-study.page

13. 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

14. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit , Tel No 0207 637 1110: Email: piu.or@insolvency.gsi.gov.uk

15. Media Enquiries should be directed to:

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

Ins/Coms/214

Contacts:

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

INS Press1
Insolvency.pressoffice@insolvency.gsi.gov.uk