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Landbanking company wound up for misrepresentation (22 August 2016)

Date: 22/08/2016
Duncan Lewis, Crime Solicitors, Landbanking company wound up for misrepresentation

A Surrey-based company has been wound up, after an investigation by the Insolvency Service found that investors has been misled by the company.

The Insolvency Service says that GLE & International Property Ltd sold plots of land to members of the public for investment purposes on the false and misleading basis that developers would then apply for planning permission and purchase the entire site, resulting in substantial profits for the investors.

The company sold plots of land at Burnley in Lancashire, Ormskirk in Lancashire, and Cheshunt in Waltham Cross, Hertfordshire.

GLE & International Property Ltd purchased plots on the Burnley site at £2.85 per square foot and immediately re-sold them to investors at £7-£8 per square foot. Between August 2010 and November 2010, the company sold a total of six plots with an aggregate sales value of £70,440.

The company purchased plots on the Ormskirk site at £4.75 per square foot and immediately re-sold them to investors at £12-£14 per square foot. Between December 2010 and February 2011, the company sold a total of seven plots with an aggregate sales value of £99,952.

The company purchased plots at the Cheshunt site at £2.45 per square foot and immediately re-sold them to investors at £12 per square foot. Between May 2011 and November 2013, the company sold a total of 74 plots with an aggregate sales value of £866,100.

The Insolvency Service investigation found that none of the sites had been developed – and that no applications for planning permission had even been made.

Enquiries made of the relevant Local Authorities established that the respective sites were within designated green belt areas and were thus highly unlikely to be granted planning permission for development.

Broxbourne Council had also issued a press release in February 2012 headed “Land Scam in the Hammondstreet Area of West Cheshunt”, warning against investment in the Cheshunt site.

Commenting on the case, Colin Cronin, Investigation Supervisor with the Insolvency Service, said:

“As invariably happens with landbanking cases of this type, the only people who profited from the company’s trading were those involved in the sale of the land to investors – and those who recruited or otherwise introduced investors to GLE & International Property Ltd and who received significant commission payments for doing so.

“The plots of land were sold to investors on the false basis that there were developers waiting in the wings to obtain the necessary planning permission and to develop the land – something which would result in a substantial uplift in the value of the plots.

“The reality is that there were no arrangements with genuine developers in place – and no steps were ever taken to apply for planning permission.

“The net result is that investors have paid highly inflated prices for plots of land which they are powerless to deal with on an individual basis.

“These winding-up proceedings show that the Insolvency Service will take firm action against companies which mislead the public in this way.”

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