The investigation also discovered that over £3.2 million had been raised overall from the public by making misleading claims as to the likely return on investment. The land banking business raised £1.6m and the carbon credit business raised £1.6m.
From the funds raised substantial and unexplained payments were made by Tullett Brown Limited to associated companies and to individuals involved with these companies as listed below:
The investigation further showed that Tullett Brown mis-sold land at five sites it had bought for modest amounts (and at a further two sites marketed on behalf of another company) to the public on the basis that the land was likely to receive planning permission, which was untrue.
Tullet Brown then started selling carbon credits to the public, again at inflated prices using similar misleading statements and unrealistic claims about the potential high returns on investment.
Commenting on the case, Chris Mayhew, Company Investigations Supervisor said:
Notes to Editors
1. Tullett Brown Limited was incorporated on 6 May 2009. The registered office of the company was at 2nd Floor Honours Building, Akeman Street, Tring, Hertfordshire, HP23 6AF. The recorded directors of the company have been Bradley Ferry (from 6 May 2009) and Catherine Lyall (from 22 March 2012 to 30 March 2012). The company has no recorded secretary. The company’s shareholders are shown to be Daniel Nwikpo (540 shares), John Nwikpo (100 shares), Bari Nwikpo (100 shares) and Ertug Kiazim (250 shares).
2. The company operated a land banking business, marketing plots of land at seven sites for sale as an investment opportunity: Wilmslow/Cheadle (two sites); Chailey/Lewis (two sites); Billericay (one site) and Windsor (two sites) The company also operated a business selling precious metals and carbon credits. Between May 2009 and May 2011 the company sold 151 plots of land totaling some 8.3 acres at the foregoing sites for £1.6 million. The sites owned by the company were sold for at least 7.2 times more than the company had paid for them. The most an individual paid for their plot was nearly 38 times the value paid by the company.
3. More recently the company also generated income of at least £1.6 million from selling carbon credits to around 128 customers. They were told “the sky was the limit” and that it was “virtually guaranteed” that the investment would increase in value between 50-100 per cent in one year.
4. The grounds for winding up the company were trading with a lack of commercial probity and making misleading and/or unfounded statements.
5. Tamar (London) Limited was incorporated on 26 November 2009. The registered office of the company was at 2nd Floor Honours Building, Akeman Street, Tring, Hertfordshire, HP23 6AF. The sole recorded director of the company has been Barinua Carr Nwikpo (from 26 November 2009). The company has no recorded secretary.
6. The company received at least £241,894 from Tullett Brown Limited which has not been explained. The grounds for winding up the company were trading with a lack of commercial probity by benefitting from the misleading and unfounded statements made by Tullett Brown Limited that induced people to invest in land and/or to invest in carbon credits.
7. Johnnystone Limited was incorporated on 30 April 2010. The registered office of the company was at 2nd Floor Honours Building, Akeman Street, Tring, Hertfordshire, HP23 6AF. The sole recorded director of the company has been John Ekpobari Nwikpo (from 30 April 2010). The company has no recorded secretary.
8. The company received at least £398,791 from Tullett Brown Limited which has not been explained. The grounds for winding up the company were trading with a lack of commercial probity by benefitting from the misleading and unfounded statements made by Tullett Brown Limited that induced people to invest in land and/or to invest in carbon credits.
9. Brad Baker Limited was incorporated on 1 September 2010. The registered office of the company was at 22 Parkdale Road, Plumstead, London, SE18 1RS. The recorded directors of the company have been Bradley Ferry (from 1 September 2010) and Ania Gembarska (from 1 September 2010). The company has no recorded secretary.
10. The company received at least £71,532 from Tullett Brown Limited which has not been explained. The grounds for winding up the company were trading with a lack of commercial probity by benefitting from the misleading and unfounded statements made by Tullett Brown Limited that induced people to invest in land and/or to invest in carbon credits.
11. In March 2012 Tullett Brown Limited was named “Commodities
Broker, 2012, in Western Europe”. The award was accepted on behalf of the company by a Simon Greenspan, described as a former futures trader who, before joining Tullett Brown Limited, had traded the currency markets and financial futures market in both London and Australia. According to Mr Greenspan the carbon market was a major growth area and that:
“It’s an area of the market that at Tullett Brown not only are we excited about, we’re very passionate about it. At Tullett Brown we’ve only ever invested in areas of the market that have truly stood the test of time, such as gold and silver, and property. When our analysts were looking for the next great area of growth, it was fairly obvious to them. It was the planet, it was the environment. The preservation of the planet allows us at Tullett Brown to give our clients what they truly seek, which is sustainable returns for many years to come”.
12. The petitions to wind up the companies were presented in the High Court on 28 March 2012 under the provisions of section 124A of the Insolvency Act 1986 following confidential enquiries carried out by Company Investigations under section 447 of the Companies Act 1985, as amended.
13. On the application of the Secretary of State the Official Receiver was appointed as provisional liquidator of the companies by Mr Justice Sales without notice to the companies on 30 March 2012 – see news release “Provisional liquidator for Tullett Brown and three related companies” issued on 5 April 2012.
14. In ordering the companies into liquidation on grounds of public interest on 27 June 2012 Ms Registrar Derrett gave a detailed judgment in which she said:
“Tullett Brown is the trading company which carried on the business of which the Secretary of State complains, being firstly the sale of plots of land at seven sites in England and latterly the sale of carbon credits to the public. The evidence demonstrates that in both cases misleading selling techniques were used. I am satisfied that customers were misled as to the likely return on their investments and the period over which that return might be realised and led generally to believe they were buying an asset that was appropriate for investment. They were sold the asset for considerably more than Tullett Brown had paid for it and a substantial increase in value would therefore be needed for the investor to break even. The evidence demonstrates clearly that it is unlikely that such an increase in value would occur. The remaining companies are connected companies, in that the sole shareholders of those companies are also shareholders in Tullett Brown and they also share officers with Tullett Brown. Substantial sums were paid to these companies by Tullett Brown, the reason for which is unknown. Petitions have been presented for their winding up on the basis that they are closely associated with Tullett Brown and have benefitted from the proceeds of Tullett Brown’s misleading sales practices and their directors failed to answer enquiries as to those payments. The grounds for their winding up are the lack of commercial probity. The investigation by Mr Peacock centred on Tullett Brown’s land banking activity and clearly demonstrates that Tullett Brown marketed land at seven sites. Five of these it had purchased for modest amounts in 2009/2010. It also sold plots of land at two further sites as agent for a third party and a portion of the sale proceeds were paid to that third party. Between June 2009 and May 2011 Tullett Brown appears to have generated sales of £1,609,200. The evidence shows that the land was sold at inflated prices. The sites owned by Tullett Brown were sold for at least 7.2 times more than Tullett Brown had paid for them in 2009/2010. The most an individual paid for their plot was 37.7 times more than Tullett Brown had paid for it. The method by which trading was carried on was that potential investors were ‘cold called’ from lists obtained from marketing agents. They were told that they could expect to wait for a return for ‘3-5 years-mid to long term’. They were led to believe that significant increases in value would occur. I am satisfied that misleading statements were made in the brochures to induce investment and that there was no real prospect of any returns. The second limb of the lack of commercial probity ground relates to the sale of carbon offset credits. I understand that this area of activity was drawn to Mr Peacock’s attention by the FSA in February 2012. I find it surprising, but the evidence demonstrates a level of income generated of £1.6 million from selling carbon credits to 128 consumers. Mr Peacock contacted two investors and it appears that similar mis-selling techniques have been employed to those employed in the sale of land. The first investor contacted had purchased land from Tullett Brown and had been approached again and invited to buy carbon credits. He made a modest investment of about £2,000. He was told that ‘the sky was the limit’ when discussing returns with the salesman and was told that he was ‘virtually guaranteed’ that the investment would increase in value between 50 and 100% in one year. The investment was compared to gold but the investor has not been able to access his carbon credits on line as promised by Tullett Brown’s salesman. The second investor invested £138,121.50 in carbon credits, again having been cold called. She was told that the projects were UN-backed, implying that they were certified emission reduction credits. In fact, the credits purchased are not UN-backed. Two of the projects in which she invested have since been approved by the UN, but this does not alter the status of the investor’s credits, which were created before that approval. The evidence demonstrates that Tullett Brown sold the credits at inflated prices. It is apparent from the evidence this was a wasting asset which was not made clear to the investor. Also that it is difficult for individual investors to sell credits. It appears that, once again, Tullett Brown employed a strategy of selling these items at a significantly inflated price, having sold the credits for approximately 3.6 times the amount Tullett Brown had itself paid. It thus appears that Tullett Brown has continued the misleading sales practices which it had employed in respect of its land banking business in order to sell carbon credits. Turning to the lack of transparency and diversion of company funds allegation, Tullett Brown’s records were inadequate to explain the purpose of the transfers to the associated companies. These companies had no trading activity but are the beneficiaries of significant sums of money. Tamar received £241,894, Johnnystone received £398,791 and Brad Baker £71,532. In the absence of any explanation being given for the payments and no obvious reason for the payments being made, I am satisfied that the grounds for winding up the connected companies, which are essentially the same for each of the connected companies, namely there has been a lack of commercial probity in benefitting from the mis-selling carried on by Tullett Brown and failure to co-operate with the investigation, are made out. On the uncontested evidence before me it is in my judgment entirely appropriate to wind up the companies on the public interest grounds sought and I do so order”.
15. Company Investigations, part of the Insolvency Service, carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation & Skills (“BIS”).
16. A carbon credit is a certificate or permit which represents the right to emit one tonne of carbon dioxide (CO2) and can be traded for money. The Financial Services Authority’s consumer information on carbon credit trading and what to consider before investing can be found at:
17. The Insolvency Service has recently warned that older people are being targeted in investment scams – see News Release issued on 15 June 2012.
18. The Insolvency Service administers the insolvency regime investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from www.bis.gov.uk/insolvency.
19. All public enquiries concerning the affairs of the company should be made to: The Official Receiver, Public Interest Unit , 21 Bloomsbury Street, London, WC1B 3QW. Telephone: 0207 637 1110 Email: email@example.com
20. Media Enquiries should be directed to:
Kathryn Montague, Media Relations Manager, Telephone 020 7674 7674 or Ade Daramy, Press Officer on 020 7596 6187 or