Insight Commodities Ltd (Insight), a company which hauled in more than 1 million from around 100 known investors through sales of shares in an untraceable bio-fuel project in Mozambique, has been wound up by the High Court in the public interest.
The winding up, on 17 July, follows an investigation by the Insolvency Service.
The investigation found that Insight was one of a number of interconnected companies that promoted a bio-fuel project based on the cultivation of the Moringa Olyfeira tree in Mozambique to investors.
The company promised prospective investors double digit returns on investment on its website, but there is no evidence that the project even existed. Telesales staff in South Africa and Spain offered investors commercial revenue rights to the cultivation of strips of land growing the wonder crop for a period of 50 years.
The sales teams promoted the scheme as an eco-friendly project that would produce a guaranteed return of 14.5 per cent within 18 months and an increasing capital value as the trees matured.
In targeting investors, the company would have been aware that internet reviews refer to the tree as a super plant or miracle tree which, as well as the bio-fuel benefits, is said to be good for nutrition and relief from diabetes, anxiety and depression among many other alleged benefits.
The company did not co-operate with the investigation and the only records available were those held by their firm of notaries. These records indicated that between June 2010 and January 2011 some 99 investors signed contracts with Insight worth at least 600,000.
Investors were also invited to use another connected company, Platinum Associates Limited (Platinum), to cultivate and manage the land on their behalf for which further management fees were payable.
Analysis of the client account operated by the notaries covering both the activities of Insight and other connected companies suggests total receipts from investors (including administration and management fees for managing and cultivating the land) came to around 1 million.
Insights role in the scheme was to contract with investors and take payment from them although the company had no UK office and used a firm of notaries in London to prepare and process the contract paperwork and take payments.
During 2011, Platinum provided investors with updates with a generally positive tone on the progress of the crop. However, in March 2012 investors were told of major problems with local conditions in Mozambique and proposed that the plantation be transferred to Gambia. A further release in May 2012 complained about the impact of false allegations being made by disgruntled members of staff. In November, investors were told that Insight would close on 23 November 2012 and that liquidation would follow soon after but nothing further was announced.
The only remaining recorded director of Insight, Soloman Gambrah, claimed he had never agreed to become a director and knew nothing about the company or its accounts. A former director, James Rowlett, claimed he was recruited by a Joseph Upchurch to deal with administrative matters but resigned in February 2012 and knew nothing about the location of company records. The only other former director, Kevin Prior, did not respond to the investigators letters and could not be traced.
The Official Receiver has been appointed liquidator and will now conduct further investigations into the company.
In winding up the company in the High Court in London, Registrar Jones, said:
I consider this to be a completely fraudulent business. The investigators have found no evidence that the company has taken any steps to ensure that the company acquired any such land. What it appears to be is that people are selling purported investment with the aim of providing no return. That is plainly a fraud that needs to be investigated as soon as possible by the Official Receiver under a compulsory winding up.
Company Investigations Supervisor at the Insolvency Service, Geoff Hanna, said:
The public needs to be on their guard against the activities of unscrupulous and unregulated companies which induce investors to part with funds on the promise of high returns unlikely to materialise.
People need to do their own diligent research into any claims made by sales staff and look sceptically at material on related websites.
The Insolvency Service will continue to clamp down on companies which deliberately mislead the public in this way and potentially ruin the lives of innocent people.