British courts have closed down two more rip-off companies scamming investors with dubious oil deals.
The closures are the latest in a flurry of companies offering overpriced shares, stakes in hotels, the chance to invest in car parks among other overseas investments offering higher than normal returns that fail to materialise.
The High Court in London has ordered the winding up in the public interest of Belize registered Eco-Energy Corp and the UK firm Sturgeon Estates Limited. The petitions were triggered by investigations by the government’s Insolvency Service following complaints from investors.
Eco-energy promised to pay investors a share of profits from oil wells in Texas, USA.
In fact, supposed investment returns were paid to investors from money staked by other clients.
Investors were introduced to Eco-energy from several UK companies, including Sturgeon Estates.
Investors let down
Sturgeon had switched to selling oil shares from dodgy carbon credit sales, which the Insolvency Service claims were unsuitable for ordinary investors.
The court was also told that both companies failed to keep accounting records for close to £1.6 million raised from clients.
David Hill, an Insolvency Service chief investigator 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 as the companies failed to observe even basic principles of record keeping, corporate governance, and due diligence.”
Hill also warned investors should avoid products which they hear about through cold calling, and even more so of products held in offshore jurisdictions with poor transparency and corporate governance.
With Eco-energy and Sturgeon, he explained client clients and no way of checking how their investments were managed.
Diamond director disqualified
In another recent Insolvency Service investigation, director Craig O’Driscoll was disqualified for 13 years after offering investors diamonds in exchange for fine wines worth more than £240,000.
However, clients dealing with his firm, Ethical Elegance Ltd, did not receive any money, and those that were sent diamonds found the values were a fraction of the promised amounts.
The company went bust in 2013 owing £215,000 to investors.