Construction firms wound-up after fraud probe

A WEB of construction and civil engineering companies, some registered to offices in Manchester and Liverpool, have been ordered into liquidation by the High Court after being used for fraud.

The Insolvency Service said the 15 companies which had reported combined sales of over £50m and assets of £8.4m, but had been run solely as instruments of fraud to obtain credit by filing false accounts and other false information.

Petitions to wind up the companies were issued and presented by Department for Business following a major enquiry carried out by Company Investigations, part of the Insolvency Service. The petitions to wind up the firms in the public interest were granted on January 28.

As such, two Manchester-registed companies,  Artists Avenue Agency Ltd of Fountain Street  and Spinningfields-registered Wardleigh Limited and Liverpool firm Sandiheath Limited of Horton House, Exchange Flags, are now in liquidation along with other firms registered in Leeds, Birmingham, Bristol and London.

The court heard how the companies had been bought off the shelf from two company formation agents by a person calling himself Jonathan Hunting.

It was told too, that although the companies were dormant and had never traded while under the control of the formation agents, when bought and activated by the new owner,  fictitious directors were appointed and the dates of their appointments back-dated by several years to the date of incorporation of the relevant company in order to lend legitimacy to the false accounts filed by the new owner, reporting significant assets and trading since incorporation by some of the companies.

The companies had no physical presence at their registered offices located in different parts of the country and each was independently owned and operated.

In ordering the companies into liquidation, Mr Registrar Briggs said there had been a “deliberate attempt to hoodwink those who rely on documents filed at Companies House”.

Welcoming the court’s winding up decisions Chris Mayhew, company investigations supervisor at the Insolvency Service said: “These supposedly unrelated companies had no legitimate purpose and existed solely to seek to obtain easily disposable goods on credit including expensive motor vehicles on lease finance with no intention of paying for them.

 “False accounts were filed by some of the companies to create the impression that they were substantial and credit worthy businesses and had been trading profitably for a number of years which the investigation found to be blatantly untrue. Where no trading accounts had been filed the first step, backdating the date of the director’s appointment, had been taken to continue with the fraud.”

He added: “I would urge businesses approached for credit to question why a potential new corporate customer would choose to back date the appointment of its recorded officers and to file accounts showing significant trading and assets at a time when clearly the company was still on the shelf of the company formation agent dormant awaiting sale.

“We work closely with a number of partners such as Companies House to prevent the abuse of the corporate regime by such deliberate lack of transparency and the Insolvency Service will continue to investigate and bring to a halt companies harming or about to harm legitimate business by operating in this way.”