High Court orders
unscrupulous property investment companies into liquidation
Five connected
companies involved in dubious property investment schemes,
operated both here and in Spain, have this week been ordered into
liquidation in the High Court following a Government
investigation.
The investigation by Company Investigations (“CI”) of the
Insolvency Service found that Property Legal Services (London)
Limited, Property Legal Services (2007) Limited, Overseas Legal
Services Ltd, Enjoy Property Ltd and United Holdings &
Investment Limited were all linked in the operation of three
distinct business activities: a fractional investment scheme, a
scheme involving the transfer of off-plan properties in Spain and
more recently a scheme involving the same day transfer of property
in the UK (see notes 8 to 10 below).
All of the companies were associated with a Mr Clive Ballard and
in the case of PLS (London) Limited and PLS (2007) Limited a Mr
Michael Alexandra (also known as Michael Mendoza).
The investigation has identified 25 victims of the scheme who
together have lost in excess of £288,000.
Commenting on the case Company Investigations Supervisor Chris
Mayhew said:
“We have strong enforcement powers and will not
hesitate to use them as here where the companies were found to
have operated complicated and dubious property schemes in a
thoroughly unscrupulous way destroying the property investment
dreams of those people unfortunate enough to have invested. More
recently significant residential property transactions were
entered into where material facts which could have influenced
the mortgage lender’s willingness to lend were not disclosed to
the lenders”.
Ends
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Notes to Editors
1. Property Legal Services (London) Limited was
incorporated on 27 February 2004. The registered office of the
company was at 1 Meadow View, Marlow Bottom, Buckinghamshire, SL7
3PA. The recorded directors of the company were Mr Clive Leonard
Ballard (from 27 February 2004 to 1 January 2007) and Mr Michael
Alexander (from 31 December 2006). The secretary of the company
was Business Innovations 2000 Limited (from 27 February 2004).
2. Property Legal Services (2007) Limited was
incorporated on 12 January 2007. The registered office of the
company was at 1 Meadow View, Marlow Bottom, Marlow,
Buckinghamshire, SL7 3PA. The sole recorded director of the
company throughout was Mr Michael Alexander. The secretary of the
company was Mr Clive Ballard (from 12 January 2007 to 2 April
2007).
3. Overseas Legal Services Ltd was incorporated on 14
February 2007. The registered office of the company was at 27 Old
Gloucester Street, London, WC1N 3XX. The sole recorded director of
the company throughout was Mr Clive Ballard. The secretary of the
company throughout was Business Innovations 2000 Limited.
4. Enjoy Property Ltd was incorporated on 21 November
2006. The registered office of the company was at 130 Woodhouse
Road, Finchley, London, N12 ORP. The sole recorded director of the
company throughout was Mr Clive Ballard. The secretary of the
company throughout was Business Innovations 2000 Limited.
5. United Holdings & Investments Limited was
incorporated on 23 January 2002. The registered office of the
company was at 1 Meadow View, Marlow Bottom, Buckinghamshire, SL7
3PA. The sole director of the company throughout was Mr Clive
Ballard. The secretary of the company throughout was Business
Innovations 2000 Limited.
6. The petitions to wind up the companies in the public interest
were presented on 3 November 2010 under the provisions of section
124A of the Insolvency Act 1986. The grounds for winding up the
companies were their involvement in schemes which were conducted
with a serious lack of commercial probity; failure to maintain
proper accounting records or file accounts; and failure to
co-operate with the investigation. The action taken was unopposed,
the companies having been dissolved.
7. On 16 March 2011 the Court ordered the restoration of the
companies to the Register of Companies and that they be wound up
on grounds of public interest by virtue of which the Official
Receiver is now the liquidator of the companies.
8. The fractional investment scheme involved members of the
public being offered property investments in the UK and Spain. The
scheme was carried on by PLS (London) Limited and PLS (2007)
Limited. Potential investors were offered
(a) the opportunity to purchase a minority share in a rented
property within a portfolio; a share in the future growth of the
property and a 9 per cent annual return on investment.
(b) that investors’ money would be safeguarded by being held in a
solicitor’s client account until security was in place; that
cautions would be registered against titles to the properties and
that shares would be allotted to investors in the management
companies of the relevant properties.
It appears that no cautions were registered against the
properties; that monies were paid into a solicitor’s client
account and then paid out to PLS (London) Limited or directly to
the company before any “security” had been put into place. At
least two of the properties within the scheme were sold and at Mr
Ballard’s direction the proceeds were paid into the account of
Overseas Legal Services Ltd and largely dissipated for his
benefit. The investment scheme failed in 2007. The investigation
has identified 25 victims of the scheme who together have lost in
excess of £288,000.
9. The off plan properties scheme involved people who had paid
deposits to purchase “off-plan” property in Spain being induced to
sell the same to Mr Ballard or companies in his “Profit by
Property” group. Under the scheme:
(a) people who had paid a deposit agreed to transfer the property
for a specified sum to Mr Ballard’s company which agreed to
provide the balance of funds needed to make the property available
for rental. There were further provisions for the respective share
the parties would have in the equity of the property and the
payment of interest to the transferor.
(b) an “additional level of security” to safeguard the transferor
was to be provided by having equivalent property equity held in
the UK.
It appears that no such security was actually put in place.
Insofar as the investigation has been able to establish
transferors have suffered losses in the region of 750,000 Euros.
10. The same day property transactions involved PLS (London)
Limited and PLS (2007) Limited purchasing properties in the UK and
selling them on at apparently inflated values on the same day. The
features of the 26 transactions identified by the investigation are:
(a) the sale of the property would be financed by a mortgage in
excess of the amount paid for the property by the companies.
(b) Mr Alexander (a former solicitor) appears to have been
responsible for the conveyance work.
(c) the gross profits arising from the 26 transactions (being the
difference between the purchase and sale price) amounted to
£859,600. The net profits, after deduction of incentives, were £408,745.
(d) forgery of signatures.
It appears to the investigation that there may be a further
150-200 similar property transactions involving related parties.
11. In ordering the companies into liquidation Registrar Derrett
said she was:
“satisfied on the uncontested evidence that substantial
monies were received from members of the public and that
adequate protections were not put in place despite the
representations made otherwise. The link between the companies
is Mr Ballard and his wife Clare Harrington also known as Clare
Lewin. The documents relating to the fractional investment
scheme and the same day property transactions involved
solicitors and accountants in particular, a solicitor Beatrice
Lebow and an accountant Iris Korobuk and there is evidence that
the signatures of both of these ladies have been forged in
various documents. There is evidence of 90 instances of forgery.
Mr Alexander has informed the investigation that he forged
signatures on 50 documents and that Mr Ballard drafted the
letters of that nature. Also that 32 letters on which Ms Lebow’s
signature appears were forged by Mr Ballard or his wife Ms
Lewin. The evidence involving the same day transactions also
demonstrates other individuals were involved in the scheme
including a property dealer called Mr Frank Kantor and that
incentive payments were made. I am satisfied the evidence
demonstrates the considerable lack of co-operation with the
investigation in particular from Mr Ballard. Some documents have
been provided by Mr Alexander but essentially there has been
limited co-operation by him with the investigation. On the basis
of the evidence it has in my judgment been demonstrated that
certainly three of the companies operated without any commercial
probity and adopted unscrupulous business practices which led to
the public suffering significant losses. One can’t determine the
whole extent of the losses due to the lack of co-operation and
lack of records and it is not clear what role two companies had
in this but they are linked and in my view It is entirely
appropriate for all of the companies to be placed into
liquidation on grounds of public interest.
12. 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.insolvency.gov.uk
13. Company Investigations, part of the Insolvency Service,
carries out confidential enquiries on behalf of the Secretary of
State for Business, Innovation & Skills (BIS). 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
14. Media Enquiries should be directed to:
Denise Rawls, Press Office Manager, Telephone 020 7674 6910 or
Ade Daramy, Press Officer on 020 7596 6187
Contacts:
Ade Daramy
Phone: 020 7596 6187
ade.daramy@insolvency.gsi.gov.uk
Denise Rawls.
Phone: 020 7674 6910
denise.rawls@insolvency.gsi.gov.uk