Two companies involved in an alleged £1.4m art investment fraud have been shut down by the courts.
The high court ordered Halifax Mannin and Hey Design Services to be wound up in the public interest on 1 March, after a probe by the Insolvency Service found they together misled or bullied customers out of about £1.35m.
The firms were brought to the attention of the Insolvency Service after several complaints were made, but during official inquiries officers were unable to determine the exact nature of either company’s trading activities, or where business activity was being conducted from.
READ MORE: Companies lost almost £1m through this donation scam
However, investigators did establish that Halifax Mannin, based in Wales, and Hey Design Services, based in Birmingham, both received payments from people persuaded to make investments in works of art by renowned painters.
According to the Insolvency Service, between October 2017 and October 2018, Halifax Mannin received almost £250,000, while Hey Design Services secured just over £1.1m in funds.
It added that the vast majority of the almost £1.4m was paid out of the companies’ bank accounts, but investigators could not determine how the funds have been spent as the directors have failed to co-operate with inquiries.
READ MORE: Watchdog warns of investment scams after Brits lost £200m in 2018
Investigators were also able to establish that the art investment scheme the companies were involved with appears to have been operated by a separate business in Spain, called Asset Consulting Services, which has been subject to a previous public warning from the Financial Conduct Authority
The court wound up Halifax Mannin and Hey Design Services on the grounds that they traded with a lack of commercial probity, having been incorporated or used as vehicles for fraud, with their sole purpose being to receive money from investors who were misled or bullied into making an investment.
Furthermore, the companies and their directors failed to cooperate with the investigation and the companies operated with a lack of transparency.
READ MORE: More than £50m lost to “romance 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.”
