Companies involved in fraudulent art investment scheme wound-up

Two companies, including one in Birmingham, involved in what appeared to be a fraudulent art investment scheme have been shut down after abusing close to £1.4m of investors’ money.

Birmingham’s Hey Design Services and Halifax Mannin, based in Wales, were wound-up in the public interest on March 1 at the High Court in Manchester.

The two companies came to the attention of the Insolvency Service after complaints were received. However, following confidential enquiries, investigators said they were unable to determine the exact nature of the trading activities of either Halifax Mannin or Hey Design Services or where their business activities were being conducted from.

However, investigators established that Halifax Mannin and Hey Design Services both received payments from people persuaded to make investments in works of art by renowned painters.

In little more than a year between October 2017 and October 2018, Halifax Mannin received close to £250,000, while Hey Design Services secured just over £1.1m in funds.

The vast majority of the £1.4m received by the two companies was paid out of the companies’ bank accounts but investigators say they couldn’t determine how the funds have been spent as the directors failed to co-operate with enquiries.

Investigators said the art investment scheme that the companies were involved with appears to have been operated by a separate business in Spain, Asset Consulting Services, which had been subject to a previous public warning from the Financial Conduct Authority.

The courts wound-up the two companies on the grounds they traded with a lack of commercial probity, having been incorporated or used as vehicles for fraud.

David Hope, chief investigator for the Insolvency Service, said: “Despite accepting more than a million pounds from members of the public, including elderly and vulnerable people, there is no evidence to indicate that the investment had any value or was likely to generate any return for the investors.

“Thankfully the courts have a put a stop to these companies, preventing anyone else from coming to harm, and I would encourage anyone approached by, or thinking about making, an investment with, Asset Consulting Services to read the warning issued by the FCA and to take independent financial advice before making any investment decision.”