Insolvency Service Investigation sees Companies Liquidated

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Two related companies that mis-sold land to the public to the tune of £3.2 million and a third connected company that offered carbon credits for investment have been ordered into liquidation by the High Court on grounds of public interest following an investigation by Company Investigations of The Insolvency Service.

Berkeley Warbeck Limited and its successor Dentam Frost Ltd both marketed residential-sized plots of undeveloped land for investment. Another linked company, Sloane Knight Ltd, marketed voluntary carbon credits for sale to the public as an investment.

The sites marketed were at:

  1. Chilton Trinity near Bridgewater, Somerset;
  2. Beacon Lane, Lincolnshire;
  3. Hatton, Warwickshire;
  4. Towcester, Northamptonshire;
  5. Woodmancote, Cheltenham; and
  6. West Cheshunt, Greater London.

Dentam Frost Ltd marketed plots at the West Cheshunt site only.

Berkeley Warbeck Limited, trading as Berkeley Land, claimed to be industry leaders in sourcing developed and undeveloped land for investment. In reality, there was no likelihood of planning permission being granted to add value to the plots of land which were located in the greenbelt and/or subject to restrictions on development.

Nevertheless investors were persuaded to part with some £2.7 million for plots on the basis that planning permission was likely to be granted resulting in a substantial increase in value within two to three years.

The company’s business ceased in March 2011. However, trading started again for a short while afterwards under Dentam Frost Ltd and raised over £500,000 from the public before being closed following Insolvency Service’s investigations.

The Court heard how three individuals, Michael Bohdjalian, Dylan Creaven and Chris Newhouse benefitted from the unscrupulous trading, although they were not formally appointed as directors of either company:.

Mr Bhodjalian and Mr Creaven were paid £539,778 and £365,328 respectively and Mr Newhouse, described as Head of UK Trading, received £163,453. Additionally, there were unexplained cash withdrawals of some £181,295.

Sloane Knight Ltd marketed carbon credits for a few weeks only and was abandoned immediately after investigation of its affairs began. It is unclear how much, if any, money it raised from the public.

Company Investigations Supervisor Chris Mayhew said:

“The public needs to be on their guard against the activities of unscrupulous companies which exploit land banking and carbon credit trading as a means to induce investors to buy land or alternative investment products such as carbon credits on the promise of high returns which may never materialise.

In this instance the land was sold for up to 31 times more than it cost in order to make those behind the companies wealthy, not investors.

This decision sends a clear message that we will continue to clamp down on companies which deliberately mislead the public in this way and potentially ruin lives of honest people, particularly older investors.”

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