International trading operation closed down

16 Nov 2006 03:45 PM

An international trading operation which involved eleven companies has been wound-up by the High Court following an investigation by the Companies Investigation Branch (CIB) of the Insolvency Service.

Eleven companies, based in the Leeds and Manchester areas, were closed down amidst real concern that they were involved in a scheme operated for fraudulent purposes including money-laundering. The companies were involved in a complex series of high-value transactions where goods purchased from UK-based companies were allegedly sold to businesses outside the EU. The full extent of the alleged fraudulent activities has not been established but, it is known that three of the companies, Jamrose Public Limted, Wetherby Fashions Limited and ICM Graphics received VAT refunds in excess of £3 million.

CIB's investigation revealed the companies' accounting records recorded various receipts and payments which, when checked against independent sources, showed that the records were false and in some cases, the companies were providing funding to effect the "sale" of their own goods. The lack of genuine transactions meant that several of the companies were not entitled to recover the VAT that they supposedly paid to various UK-based suppliers and substantial movements of money within and between the companies, could not be explained.

CIB's investigation also revealed Wetherby Fashions Limited, a manufacturer of garments which diversified into a more general business of "import/export trading" and "brokerage", based in Leeds, recorded an annual turnover of £20 million, 75 per cent of that turnover coming from a small number of very large deals. Some of the company's deals were brokered through an offshore bank in Curacao which was shut down in September 2006 by HMRC on the basis of its links to so-called "Carousel" fraud. Investigators also found evidence that more traditional trading hid a range of secretive deals the company kept false and misleading books and records, payments totalling at least £1.4 million recorded by the company as being made to a number of different companies were in fact paid to House Need Limited and receipts totalling £1.9 million recorded as coming from a Pakistani company Shan Traders were in fact received from the UK-based company ICM Graphics.

ICM Graphics Limited, also based in Leeds, had an annual turnover which increased from £110,000 in 2002 to over £14 million by 2005. This "success" was based on back to back deals involving goods allegedly sold mainly to businesses in Pakistan. However, in addition to concern that the company was involved in the scheme operated for fraudulent purposes, the Secretary of State also alleged that ICM Graphics had been involved in the improper business practice of raising two different invoices in relation to the same transaction. One invoice reflects what is said to be the actual price payable in respect of the transaction whereas the other invoice is for a lesser price. The practice enabled or provided an opportunity for third parties to defraud revenue and customs authorities.

Notes to editors

1. The eleven inter-connected companies wound-up in the public interest were: Wetherby Fashions Limited, ICM Graphics Limited, ICM UK Limited, Jamrose Public Limited, Selective Printing Machinery Limited, Selective Printing (UK) Limited, Napper Trading Limited, Apex Trading Services Limited, Plantstripe Limited, Tech-Financial Limited and House Need Limited.
The registered offices of the companies are as follows:

Wetherby Fashions Limited - 2 Grant Avenue, Roundhay Road, Leeds, LS7 1RQ

Jamrose Public Limited - Griffin Court, 201 Chapel Street, Manchester M3 5EQ

House Need Limited - 306 Keighley Road, Bradford BD9 4EY

ICM Graphics Limited - 75 Northbrook Street, Chapel Allerton, Leeds, LS7 4QH

ICM UK Limited - 156a Pudsey Road, Bramley, Leeds, LS13 4JG

Selective Printing Machinery Limited - 3rd Floor, Wellington Plaza, 31 Wellington Street, Leeds, LS1 4DL

Selective Machinery (UK) Limited - Concept House, Brooke Street, Cleckheaton BD19 3RY

Napper Trading Limited - BWC Business Solutions, 8 Park Place, Leeds, LS1 2RU

Tech-Financial Limited - 2-4 Kipping Lane, Thornton, Bradford, West Yorkshire, BD13 3EL

Apex Trading Services Limited - 32-34 Duncan Street, Old Field Road, Salford, M5 3SQ

Plantstripe Limited - 32-34 Duncan Street, Old Field Road, Salford, M5 3SQ.

2. The petitions to wind-up the companies in the public interest were presented on 17th August 2006 under the provisions of Section 124A of the Insolvency Act 1986 following investigations carried out under section 447 of the Companies act 1985 by the Companies investigation Branch of the Insolvency service. The winding-up orders were made on 2nd November 2006.

3. 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.

4. The Insolvency Service also carries out confidential enquiries on behalf of the Secretary of State for Trade and Industry, through Companies Investigation Branch. 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.

5. All public enquiries concerning the affairs of the company should be made to the Official Receiver at: Official Receiver, Public Interest Unit North, PO Box 326, 1st Floor Boulton House, 17-21 Chorlton Street, Manchester M60 3ZZ. Telephone: 0161 934 4182. e-mail: piu.north@insolvency.gsi.gov.uk

6. Further details about the work of The Insolvency Service can be found on the website: http://www.insolvency.gov.uk