Fears that some investment firms offering carbon credit investment opportunities are just scams has been confirmed after the government closed down one of the industry’s leading players.
The government-run Insolvency Service has ordered that Eco Global Markets Ltd be put into provisional liquidation on ‘public interest grounds’.
The petition for liquidation was brought on behalf of Secretary of State for Business, Innovation & Skills (BIS) at Manchester Crown Court.
Investigators had been looking at the activities of the firm and its offering of carbon credits as a potentially lucrative investment.
The court has now appointed an official receiver which will help protect the firm’s assets, including third party funds and trust money, and financial records on behalf of its creditors.
Worthless investments
Eco Global Markets was incorporated in April 2010 and its registered office address is listed at Heron Tower, Bishopsgate, London.
Carbon credits are the name given to a certificate which allows the owner to pump carbon dioxide (CO2) emissions into the atmosphere.
It is these ‘permissions’ which can then be traded but many buyers are unaware that there are two versions of them: voluntary emission reductions (VERs) and certified emission reductions (CERs).
Investors in the UK are increasingly targeted to buy VERS but these certificates are effectively worthless on the open market because they are a voluntary standard and are not an officially-recognised.
The trading in credits is becoming increasingly controversial because it is an unregulated market and, as such, leaves investors unprotected.
The Financial Services Authority (FSA) has recently urged investors to contact them with information on any dubious carbon credit investments.
FSA blacklist
Last year, the FSA added 13 firms to its warning list about companies who may be mis-selling carbon credits.
A FSA spokesman said: “Any firm offering a financial service in the UK must be authorised by us but, unfortunately, there are companies operating without our authorisation.”
For those in doubt, the FSA runs a register of authorised firms and investors buying carbon credits from an unauthorised company or individual will not be able to use the Financial Ombudsman Service or the Financial Services Compensation Scheme for compensation, should the invest not bring its promised returns.
The Insolvency Service says that because the liquidation is before the court they will not be providing any more information until the next hearing on March 13, 2013.
Anyone concerned about the liquidation of Eco Global Markets should contact the official receiver on 0207 637 1110 or email: [email protected]
