Jubilee Diamonds Ltd, a company that sold coloured diamonds as an investment opportunity to the public, has been wound up in the public interest by the High Court in London on 6 November 2013 for making false claims as to investment returns and exit strategies for investors.
The winding up follows an investigation by the Insolvency Service.
The company traded for about eighteen months and received some 2.3million during this period.
The investigation found: the company traded out of serviced offices at 40 Bank Street, Canary Wharf and styled itself as a diamond broker. The company made a series of false claims - using high pressure sales tactics - including that it sourced diamonds directly from mines, that minimum investment returns of 15% per year were obtainable, that the company had a diamond cutting facility in Antwerp, and that various exit strategies existed for investors, including onward sales at auction houses and to collectors and retailers.
The investigation also found that the company:
obtained its diamonds from online retailers, whose products were directly available to the public.
charged investors with whatever mark ups it could engineer, ranging from 76% to 1,592% in a sample of cases. The overall mark up was over 500% according to the companys management accounts. advertised its products on various websites and in The Mayfair Times. One of those websites, www.jubileediamonds.ltd.com , included a series of wholly fictitious testimonials from supposedly satisfied customers. The directors of the company claimed that this was advertising puff.
had a high turnover of over 100 brokers in a period of 18 months, a number of whom earned commissions of 25% of the sales price obtained. Brokers also commonly used pseudonyms in dealing with customers.
required customers to have their diamonds stored for safekeeping at a storage facility at Harrods department store. The company claiming that customers had direct access to their diamonds at any time. In practice the storage facility was held in the name of a director who was the only one who could access diamonds on behalf of customers.
The company was placed into provisional liquidation on 1 August 2013, following the presentation of a petition to wind up the company on 31 July 2013.
Commenting on the case, David Hill, an Investigations Supervisor, with the Insolvency Service, Said:
The only people to benefit from this company's business were those who ran the company and not the investors. They set out to trade with a lack of scruples, relying on badgering tactics to get investors to part with their money.
The closing down of this company shows the Insolvency Service will not hesitate to take action to put such unscrupulous companies out of business.