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Crime Solicitors

Carbon credits company liquidated after “delivering misery to vulnerable investors” (21 December 2015)

Date: 21/12/2015
Duncan Lewis, Crime Solicitors, Carbon credits company liquidated after “delivering misery to vulnerable investors”

A London company which offered the public the opportunity to invest in carbon credits or diamonds has been ordered into liquidation in the High Court on grounds of public interest, following an investigation by the Insolvency Service and video-linked court evidence from investors.

Mulberry Wynford Ltd claimed to have headquarters in the City of London’s financial district – and to also have offices internationally and “uniquely positioned” to take advantage of “current global economic trends and maintain a truly global presence for its clients”.

The company’s management team claimed to have over 150 years of combined industry experience – and to provide “unparalleled expertise” to its selective commercial, private and high net worth clients across a wide range of products and services.

Its former website www.mulberrywynford.com claimed to offer the latest and most beneficial investment products and services, which were stated to be “Diamond and Climate Reserve Tonnes (CRT) opportunities”.

The court heard that far – from having the expertise claimed and a global presence, with overseas offices in New York, Hong Kong and Dubai – the reality was the company had limited mail forwarding services at its City of London serviced-office registered address, with two recorded directors Michael Bashir (37) and Andreas Christodoulou (25).

The company had vigorously opposed the winding up action – and was initially legally represented, but later Mr Bashir and Mr Christodoulou both represented the company. At the trial, High Court Deputy Registrar Garwood admonished them both for their “Chuckle Brothers” approach in presenting the company’s defence.

While the company initially asserted to the court that it had not sold carbon credits to the public for investment, the court heard how the company had purchased “pre-qualified data” from an investor sales leads company – and that it had sold carbon credits to members of the public for investment, with evidence heard in court from three investors, including one UK investor in person and two statements by video link from County Cork in Ireland and Johannesburg in South Africa.

The court heard how the company had recorded its “compliance” calls to investors (although these were not made available by the company) – but not its sales calls, because “of the hundreds of sales calls it made”.

The company’s terms and conditions required investors who wished to dispose of their investment sold to them by the company to request this in writing to the company. However, any such requests could not be delivered, as the company did not maintain adequate registered office arrangements to receive mail addressed to it.

The company’s terms of business disclaimers – together with its “compliance” calls to investors – were found by the court to be no more than a “cover your back” arrangement, which essentially advised investors that nothing they had read or been told by the company was “true”.

The extent of the overall losses to investors is undetermined and the Official Receiver is requesting information from anyone contacted by the company.

Insolvency Service Company Investigations Supervisor, Chris Mayhew, said:

“This company came to our attention having supplied 500 Climate Reserve Tonnes (CRTs) carbon credits to Windward Capital Limited, a company that was ordered to close in the public interest earlier this year.

“The credits were ostensibly bought for £300 each as part of Windward Capital Limited’s corporate social responsibility objectives, to off-set its own carbon footprint.

“Why a company selling carbon credits to the public at inflated prices would itself turn to another sales company for credits in order to voluntarily off-set its carbon emissions – and pay 115 times the price that Mulberry Wynford Ltd paid for the credits – could not be credibly explained to the court.

“The arrangement was clearly contrived to mask Mulberry Wynford Ltd’s participation in, and benefit from, Windward Capital Limited’s unscrupulous operations to sell carbon credits to the public for investment, a business which
Mulberry Wynford Ltd also separately carried on, despite its assertions otherwise.

“In doing so, the company claimed its core value was to provide the highest calibre services and products to its clients. In truth, it specialised in delivering misery to vulnerable investors, both here and abroad, who were taken in by its lies.

“The Insolvency Service will not allow rogue companies to rip-off vulnerable and honest people and – working closely with other regulators – we will investigate abuses and close down companies if they are found to be operating or about to operate against the public interest.”

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