WIREDGOV

9. Dakota Partners International CC Limited was incorporated on 8 February 2011. The registered office of the company is Suite 3, 4 Town Quay Wharf, Abbey Road, Barking, Essex, IG11 7BZ. The recorded directors of the company have been Mr Imran Rasool (for one day on 8 February 2011 and re-appointed on 20 April 2011) and Mr Christopher Gill (from 8 February 2011 to 20 April 2011). The company has no recorded secretary.

The company operated a land banking business also latterly from 150 Minories, London, EC3N 1LS selling plots of land at the same four sites as Dakota Partners International Limited. It additionally sold carbon credits to the public raising some £71,102.

The grounds for winding up the company (which were not opposed by the company) were trading with a lack of commercial probity.

10. Morgan Rey Consultants Limited was incorporated on 4 October 2010. The registered office of the company is Communications House, 26 York Street, London, W1U 6PZ. The recorded directors of the company have been Mr Mark John Tull (from 28 January 2011) and Miss Lydia Elizabeth Colebrook (from 4 October 2010 to 28 January 2011) to whom mail addressed to the registered office was forwarded to. The company has no recorded secretary.

The company www.morganreyconsultants.com operated a land banking business and (together with MRT Land Holdings Ltd) also carried out the “back office” administration for registering investors’ plots of land. It also entered into option agreements with both Dakota Partners International Limited on 15 September 2010 (prior to its incorporation on 4 October 2010) and Dakota Partners International CC Limited on 8 February 2011 for those companies to sell land at the foregoing Hollinsfield site. It appears that at least 38 plots were sold on its behalf for £352,500.

The grounds for winding up the company (which were not opposed by the company) were trading with a lack of commercial probity.

11. The petitions to wind up the companies were presented in the High Court on 27 February 2012 under the provisions of section 124A of the Insolvency Act 1986 following confidential enquiries carried out by Company Investigations under section 447 of the Companies Act 1985, as amended.

12. On the application of the Secretary of State the Official Receiver was appointed as provisional liquidator of Manor Rose Limited and MR Investment Club Limited by Mr Justice Floyd without notice to the companies on 28 February 2012 – see news release “Court appoints provisional liquidator for land banking company” issued on 6 March 2012.

13. In ordering all of the companies (apart from Dakota Partners International Limited which had earlier been wound up) into liquidation on grounds of public interest on 30 May 2012 Registrar Derrett gave a detailed and damning judgment in which she said:

“Four of the companies, namely Manor Rose Limited, MR Investment Club Limited, MR Investment Club Phase 1 LLP and Manor Rose Carbon Credit Limited, are represented by Burlingtons Legal LLP and they have been in recent correspondence with the Secretary of State’s solicitors on behalf of Mr Moore. The Court finds itself in the unusual position of having opposing evidence filed by Mr Moore in two witness statements, the first dated 23rd May 2012 and the second of no specific date in May 2012. Counsel appears on behalf of the four companies today saying that they do not contest the petitions, seeking only to ensure that the Court has all the relevant information before it so that Mr Moore cannot be criticized for not putting the information before the Court at a later stage. Further, that Mr Moore will not be seeking to take any more active role in the proceedings, but that his evidence should still carry equal weight to that of the Secretary of State when considering whether it is just and equitable to wind up the companies.

At a hearing of a public interest petition the Court will determine what is just and equitable and, whilst I have fully taken into account Mr Moore’s evidence, I do not give it equal weight to the considerable evidence presented by the Secretary of State. This is not a paper application and there is no opportunity for Mr Moore’s evidence to be tested at cross examination as these petitions are being heard today on an uncontested basis. Mr Moore has co-operated to a limited extent, but he should have properly ventilated what he now says some time ago and I am of the view that his evidence is self serving. He states that all of the marketing material was provided by either of Boldacre or MRT Land Holdings or Betta Build and that he had no reason at the time to doubt the information provided to him. Frankly this is just not good enough and Mr Moore had a duty to check whether information being passed out to the public to encourage them to invest was accurate.

The essence of the Secretary of State’s case is that the companies have, or are at the risk of, trading with a lack of commercial probity. The basis of that allegation is the business of these companies in selling plots of land to members of the public as investments on the basis of misleading statements in their marketing material and in oral communications with investors. The practice in question involves buying plots of undeveloped land and sub-dividing them into smaller plots to be offered as investments. As indicated, this practice is commonly referred to as ‘land banking’ and unfortunately comes before this Court on far too many occasions. The Secretary of State’s allegations of unscrupulous land banking relate to four sites: Hollinsfield, Cross Keys, Flax lane and Gambles. It was apparent the Flax Lane and Cross Keys sites were found to have been marketed by Dakota and Manor Rose, as well as a company called Century Property Group Limited. I am not concerned with that company today as there are separate winding up proceedings.

The evidence demonstrates that MRT Land Holdings, Morgan Rey Consultants and Boldacre obtained permission from the various land owners of those sites to market and sell plots. Those companies acted as intermediaries and had agreements with various sales agents including Dakota and Manor Rose which allowed those agents to sell the plots on their behalf. I am satisfied that the evidence obtained during the investigation shows that Dakota and Manor Rose between them sold plots on the four sites using almost identical marketing materials. I am satisfied that the method of operation was to employ sales people to make high volumes of unsolicited telephone calls in order in order to garner interest from members of the public who were subsequently misled into making an investment. I am satisfied that the allegations set out in relation to the land worth are substantially proven and that it was almost impossible for investors to see the profits claimed.

The evidence is that investors were given misleading statements designed to and actually make them invest. There was a serious disregard for investors and the business was conducted with a complete lack of commercial probity.

Although Mr Moore asserts that Manor Rose had no inter-relationship with the other companies such as Dakota, it is apparent this was not so as the provisional liquidator has reported that Manor Rose paid Mr Michael Moore, Mr Moore’s brother who was responsible for the Dakota sales staff, the sum of £224,900.37 on 4 November 2010. Despite requesting an explanation from Mr Moore, through his solicitors, on 12 March 2012, Mr Moore has yet to respond.

I am fully satisfied that the Secretary of State’s evidence demonstrates a serious disregard for investors and that the business of these companies was conducted with a complete lack of commercial probity. The Middleport site falls foul of the Financial Services and Markets Act 2000 and in my judgment is an unlawful collective investment scheme and it is entirely appropriate for me to make orders in respect of all of these companies and I therefore make the usual compulsory orders on the grounds sought. “

14. Company Investigations, a branch of the Insolvency Service, carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation & Skills (“BIS”).

15. In all 75land banking companies have now been wound up on grounds of public interest following investigation by Company Investigations,none of which have shown a profit for investors who have lost over £50 million. A list of the companies is available on request from the press office (see Note 20 below).