Two connected companies based in North London that falsely claimed to collect clothing for charitable or benevolent purposes have been closed down by the High Court following an investigation by Company Investigations of the Insolvency Service.

The court heard that the two companies, Helping Arms Ltd and Rogaile Ltd, operated jointly as Helping Arms, supposedly collecting donations for Eastern European and African countries.

The investigation showed Helping Arms mainly operated as a commercial venture despite misleading statements online, and in leaflets and bag labels concerning its charitable or benevolent purposes.

Although no records were produced of where leaflets were distributed , it appears operations were in and around London and a large part of the South and South East. There is evidence leaflets were distributed in Gloucestershire, Hertfordshire, Oxfordshire, Barnet, Brent, Croydon, Swindon, Southampton and Luton.

The investigation also showed Helping Arms was successful in making money from supplying clothes to eastern Europe. The 14 months until December 2011, produced sales of some 645,000. However, no evidence was found showing any funds going to the alleged intended recipients.
In ordering the two companies to be wound-up, the court found their activities not only misleading but in breach of regulations contained in the House to House Collections Act 1939, which regulates door to door leaflet dropping for charitable purposes. The Act requires companies conducting collections for charity to obtain a licence, which none of the companies had done.

Further, the investigation found that the companies failed to keep records of their stock and there was a lack of transparency regarding the ownership of both companies. In addition, there had been a lack proper cooperation with the investigation by officers of the companies.

Commenting on the case, David Hill, an Investigation Supervisor with The Insolvency Service said:
Con artists like these who abuse the publics good intentions towards charitable causes are a scourge on society and should be punished.
In winding-up these companies, the court is sending the message that such companies will face the law and be removed from the public arena. The sole aim of the companies appeared to be a means of enriching those in charge.
As these two companies have discovered, The Insolvency Service has powers to investigate and close down such companies, if they are found to be acting against the public interest.