Investment Companies Tricked Customers Out Of £1m

Lisa Smith, BA (Hons), CeFA

Companies that misled customers into spending £1 million on dubious alternative investments have been wound up in the High Court.

In the first case, Ozden Hassan, 47, from South East London, was banned as a director for 14 years for his involvement in two companies offering investors the chance to buy carbon credits, rare earth metals, gold and coloured diamonds.

Investors were told their money would buy gold bars and coins which would then be kept in secure storage, and that they would own that gold.

However, customer money was spent on ‘unallocated gold’ or speculations in gold futures which were bought in the name of Hassan’s companies and not the investors. This meant customers had no stake in any of the gold, which was sold to pay running costs of a separate business.

Missing money

The companies, Caledonian Ltd and Caledonian Commodities Ltd, raised around £570,000 from investors – with only about £60,000 available for creditors.

Anthony Hannon, Official Receiver at The Insolvency Service’s Public Interest Unit, said: “These companies seriously misled members of the public to part with their savings and did nothing but bring misery to their customers in order to benefit the directors and salespeople at substantial cost to the investors.”

In a separate case, Intercontinental Wines Ltd,  of Southampton, Hampshire, was wound up after an investigation by The Insolvency Service that found customers were pressured in to making investments by cold-calling salesmen recruited by the sole director and self-titled wine broker David Angel.

False promises

The company made sales of over £460,000, while buying £100,000 of stock. This meant that without knowing it, customers would need the value of the wine to increase by more than 400% to at least break-even.

Irshard Mohammed, Senior Investigator & Case Manager at the Insolvency Service, said: “Intercontinental Wines enticed customers with the promise of attractive returns from building a portfolio of fine wines, entrusting the company to make purchases and store wines at bonded warehouses on their behalf.

“However, the company blatantly failed to do so in the vast majority of sales made and instead took customers’ funds on face value, frittering it away on unexplained or personal expenditure.”

Leave a Comment