The High Court has wound up two companies which sold “dubious” oil investment products to the UK public.
An investigation by the Insolvency Service into Eco-Energy Corp (Eco) – incorporated in Belize – and Sturgeon Estates Limited (Sturgeon) found Eco acted as the contracting party and received customers’ money through an account with a firm of UK solicitors.
Payments supposedly entitled investors to a percentage interest in the profits made by a number of oil wells in Texas, USA.
However, customers had no way of independently certifying that their investments were genuine – or that they were being properly handled.
Sales were “introduced” by a network of mainly UK companies, including Sturgeon – a company which had previously sold carbon credits to the public as an investment product.
Carbon credits are widely acknowledged to have been wholly unsuitable for retail investors because of the lack of a resale market.
The High Court found that both Eco and Sturgeon had traded with “a lack of transparency/stewardship” and a “lack of commercial probity”.
Although there had been a failure in both companies to maintain adequate books and records, the investigation also found that at least £943,000 and £630,000 had been received by Eco and Sturgeon, respectively.
The High Court also heard how a number of payments were made to customers in the guise of returns on their investments – but were, in fact, funded by monies paid in by other investors.
David Hill – a chief investigator for the Insolvency Service – said:
“Oil production is a risky business, but whereas investing in a company listed on a recognised Stock Exchange should ensure that the corporate side of business is properly handled, Eco and Sturgeon’s customers were wholly let down in this regard.
“The risks involved in investing were multiplied many times by those companies’ failures to attend to even basic principles of record keeping, corporate governance and due diligence.
“The concern is that these failures mask the true intentions of those behind the companies – investors should be wary of any products which they hear about through cold calling; and even more so of products held in offshore jurisdictions with poor transparency and track records as regards corporate governance.”
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