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UK court orders 13 firms liquidated for carbon credit sales schemes
May 22, 2014 / 6:01 PM / 3 years ago

UK court orders 13 firms liquidated for carbon credit sales schemes

LONDON, May 22 (Reuters) - A British court has ordered into liquidation 13 companies after an investigation by the Insolvency Service found that they had made over 19 million pounds ($32 million) from selling carbon credits to vulnerable investors.

“It is plain that the companies were trading carbon credits as investments, which is wholly incorrect and misleading. Sales were made at excessive profit margins, making investment unlikely to lead to a profit or to break even,” registrar Clive Hugh Jones of the UK High Court said in a ruling, according to the Insolvency Service.

The agency said Eco-Synergies Ltd, a wholesaler of voluntary carbon credits, was at the centre of the 13 now liquidated firms that marketed the credits “using false claims contained in slick brochures”, among other methods.

Chris Mayhew, company investigations supervisor at the Insolvency Service, added in a statement: “investors including vulnerable individuals and often repeat victims who were urged to buy more and more credits have lost their money”.

The Insolvency Service administers and investigates the affairs of bankrupt companies and those wound up by courts. Officials at the service could not immediately be reached for further comment.

Voluntary carbon credits can be used by individuals and companies to offset greenhouse gas emissions. Some firms have marketed them with promises of lucrative returns, targeting mainly the elderly.

The Insolvency Service said Eco-Synergies had sourced credits for a total of 2.3 million pounds, or at an average of 65 pence each, and then sold them to investors via ostensibly unrelated companies at a mark-up of as much as 869 percent.

Efforts by Reuters to contact Eco-Synergies by phone or email were unsuccessful.

In Britain, at least 32 firms have been forced to shut since 2012 over claims they collectively made more than 43 million pounds using high-pressure techniques to sell the illiquid and over-priced credits, the Insolvency Service said.

The agency in November estimated that at least 1,500 investors had been defrauded by carbon credit sellers.

British watchdog the Financial Conduct Authority last year released findings of a survey of 125 carbon investors, showing that not one had made money from investing in credits.

It said nearly 200 carbon firms have been put under investigation since 2011, and has listed many of them on its website.

$1 = 0.5925 British Pounds Reporting by Michael Szabo; editing by Jane Baird

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