A Southampton-based company that misled customers to invest in fine wines has been wound up in the High Court.

Intercontinental Wines Limited was wound up in the public interest at the High Court on 23 November 2018, with the Official Receiver appointed as liquidator. The company?s sole appointed director since incorporation in 2011 has been David Angel.

The court heard that the company claimed to be a wine broker and used high-pressure cold calling to target members of the public.

Representatives would emphasise that investments in wine were secure and resulted in profitable returns. Customers were also told that the cases of fine wine would be stored in bonded warehouses under personal accounts.

However, customers began to complain about various matters, including a complete failure by the company to respond to queries, such as information about the safe holding of wines supposedly purchased on their behalf.

Complaints were made to the Insolvency Service, with the following investigation discovering that Intercontinental Wines only made purchases for a small percentage of paid customers on an apparently ad hoc basis and not according to its contractual requirements to do so on behalf of each customer.

And only around 10% of customers had cases of fine wine stored in bonded warehouses under personal accounts.

Further enquiries found that Intercontinental Wines? bank records and financial statements showed wine purchased by the company was only worth a fraction of their sales by value.

In a two-year period between March 2015 and February 2017 the company made sales of over ?460,000, while purchasing just only ?100,000 worth of stock. This meant that without knowing it, customers would need the value of the wine to increase by more than 400% to at least break-even.

The company failed to provide records of customers? purchases and it was only later when investigators obtained the banking records, were they able to evidence that only a small proportion of sales proceeds were used to purchase wine. Instead, the company?s bank accounts were used for personal expenditure.

And the company vacated its joint trading and registered premises in Southampton in March 2018 but failed to disclose this to customers or to the Registrar of Companies.

Irshard Mohammed, Senior Investigator & Case Manager at the Insolvency Service, said:

Intercontinental Wines enticed customers with the promise of attractive returns from building a portfolio of fine wines, entrusting the company to make purchases and store wines at bonded warehouses on their behalf. However, the company blatantly failed to do so in the vast majority of sales made and instead took customers? funds on face value, frittering it away on unexplained or personal expenditure.

These winding-up proceedings show that we will take firm action against companies that operate in such an unscrupulous way.