Llewellyn Adam Hannah-Shelton (L A Hannah-Shelton) and Samuel Lucas Hannah-Shelton (S L Hannah-Shelton), who mis-sold parcels of land for investment, have been disqualified from being directors of companies for a total of 15 years following an investigation by the Official Receivers Public Interest Unit (North), part of The Insolvency Service.
L A Hannah-Shelton, 33, was the director of Britannia Land Management Ltd (Britannia), Regency Land Group Ltd (RLG) and Regency Land Sales Ltd (RLS), while his brother S L Hannah-Shelton was a director of Britannia.
The two have given an undertaking to the Secretary of State for Business, Innovation and Skills (BIS) not to promote, manage, or be a director of a limited company for 11 years and four years respectively from 14 November 2012.
The investigation found that under Mr L A Hannah-Sheltons control, the companies purchased plots of land in Chailey, East Sussex and Grantham, Lincolnshire between February 2010 and March 2011. The companies then sold small parcels of those plots of land to potential investors at a mark up of up to 850%.
The three companies were wound-up by the High Court in November 2011 owing creditors and shareholders at least 430,040.
In giving his undertaking, Mr L A Hannah-Shelton did not dispute that he caused the companies to make misrepresentations to clients with regard to the companies capabilities and expertise, expectation of returns on investments the likelihood of getting planning permission and future development prospects of land.
The companies had no physical presence in the UK and operated from a virtual office. Company activities were conducted by Mr L A Hannah Shelton from Spain, from where employees made unsolicited phone calls to members of the public in the UK.
Potential investors were provided with sales documents which gave a misleading impression of the companies prior history and expertise in land investments, and of the potential profit to be made from the land. This resulted in almost 400,000 in Investment, but it did not yield any profit for the investors.
Mr L A Hannah-Shelton also misappropriated money paid to Britannia and did not dispute that he had altered a cheque for 31,948 made payable to a building society and paid it into his own bank account.
Further, Mr S L Hannah-Shelton did not dispute that he failed to ensure that Britannia and RLG maintained adequate accounting records. The lack of accounting records meant that investigators could not identify the reason for expenditure by the companies totaling 293,789, and in particular were unable to verify that the expenditure was legitimate.
Commenting on the disqualifications, Official Receiver Ken Beasley said:
Land banking scams are a serious matter and the public should be wary of such alleged investment opportunities, particularly when receiving unsolicited sales calls. Mr Llewellyn Adam Hannah-Shelton caused the companies under his control to mislead investors causing them significant financial losses.
In doing so his conduct fell far below that expected of a director of a limited company.
In failing to take an active role in the companies affairs, Samuel Lucas Hannah-Shelton, as a formally appointed director, assisted his brother and failed to discharge his responsibilities to Britannia Land Management Limited and its creditors.
The Insolvency Service has strong enforcement powers and we will not hesitate to use them to remove dishonest or reckless directors from the business environment