LONDON, July 11 A British court has ordered two firms into liquidation after an investigation found they had made nearly 2 million pounds ($3.4 million) through selling carbon credits, diamonds and other commodities to investors using false and misleading information.
Pinecom Services Limited and Pine Commodities Ltd were ordered closed by the UK High Court on July 2 after they were found to have continued a business operated by three firms that were shut in the last two years for similar reasons, Britain's Insolvency Service said on Friday.
"The grounds for winding up the companies arise from the connections to companies that this court has previously wound up, namely Tullett Brown Limited, Foxstone Carr Limited and Carvier Limited, all of which were engaged in the trade of selling carbon credits to members of the public," registrar Christine Derrett of the court said in a ruling, which the Insolvency Service cited in a statement.
"The companies appear to have been incorporated to take over the trade of those other (three) companies once they had been wound up. The two companies are, to use the colloquial term, 'phoenix' companies," she added.
Attempts by Reuters to contact the firms were unsuccessful.
The Insolvency Service, a branch of the UK Department for Business, Innovation and Skills, administers and investigates the affairs of bankrupt companies and those wound up by courts.
The agency said Pinecom Services and Pine Commodities sold carbon credits generated by 11 clean energy projects around the world, storing the revenues in a bank account in the Seychelles.
It added that the firms made over 1.8 million pounds from cold-calling potential investors and selling them carbon credits as well as diamonds, precious metals and storage units as investments.
"Contrary to the companies' claims, their services, in plain English, were designed to rip off investors," Chris Mayhew, company investigations supervisor at the Insolvency Service, said in the statement.
The firms Tullett Brown and Foxstone Carr were shut down in 2012 and Carvier in May 2013 for collectively earning at least 2 million pounds using high-pressure techniques or selling carbon credits at exaggerated prices to vulnerable, often elderly investors, the Insolvency Service said.
The High Court said evidence showed that several people linked to the three firms were directors or worked at Pine Commodities or Pinecom Services.
An Insolvency Service spokesman said they were able to re-establish the two new businesses because even though the three firms were ordered into liquidation, none of the individuals had been disqualified from acting as directors in Britain.
Under UK law, disqualification can take up to two years from the date a company is ordered into liquidation.
"While the three firms were being liquidated, it appears that (the individuals) tried to replicate the business model and do it all again," the spokesman said, adding that he was unable to confirm whether or not criminal investigations were underway.
Some 37 firms have been ordered into liquidation by courts since 2012 over claims that they collectively made more than 45 million pounds using high-pressure techniques to sell illiquid and over-priced carbon credits.
The Insolvency Service has estimated that at least 1,500 British investors have been defrauded by carbon credit sellers.
($1 = 0.5877 British Pounds) (Reporting by Michael Szabo; editing by Jane Baird)