Updated: 5th February 2020
A pair of companies based in Liverpool have been ordered into liquidation by the High Court after an Insolvency Service investigation found they were involved in what amounted to a £1.5 million property scam.
The orders were made on the grounds of public interest after it found that the two companies were part of a scheme that saw members of the public being sold plots of land supposedly earmarked for future development.
In reality, the plots of land were very unlikely ever to be developed, the Insolvency Service’s investigators discovered and a director of the two companies under investigation eventually admitted in court.
“The scheme made no commercial sense and was once more calculated to part honest people from their money,” said Chris Mayhew, company investigations supervisors with the Insolvency Service.
“The Insolvency Service will not allow companies to operate in this way and will investigate abuses and close down companies if they are found to be operating against the public interest.”
The two companies that have been ordered into liquidation are JDG Properties Limited, which owned the land on which properties were supposedly to be developed, and Tithebarn Trading Ltd, which purported to be the developer of the site.
JDG Properties acquired the land at the centre of the controversy in April 2011 for £130,000, with the company’s directors retaining a quarter of the site and deciding to sell the remaining 390 plots to the public.
Despite full knowledge that planning permission for any developments at the site was very unlikely to be approved, directors of the two companies now wound up apparently did not object as a third company, Gilbert Webb Estates Ltd, marketed and sold plots of land on the basis of claims that the scheme was worth close to £20 million.
Gilbert Webb Estates Ltd was ordered into liquidation in December 18th 2014.
Neither of the companies ordered into liquidation this month were accused of actively mis-selling land themselves but they were described as being “symbiotic to the land banking scheme and fortified the mis-selling of plots of land by Gilbert Webb Estates Ltd enabling all involved in the scheme to profit apart from investors”. Our extensive office network comprises 78 offices across the UK with a partner-led service offering immediate director advice and support.