MANY of us tune into the BBC TV series, Fake or Fortune, to see Fiona Bruce and her team of sleuths examine the provenance of notable artworks. It’s triggered a surge in the number of people across Yorkshire and the North East – from Huddersfield to Harrogate, Doncaster to Darlington, and Bradford to Bridlington – investing in masterpieces.
Clearly, as the insolvency media reported this week, it’s something that needs to be done with caution. Just ask those investors involved in an insolvency case that was not played out on their telly – but in their real life.
It’s because people in Yorkshire and the North East are among those still counting their financial losses after falling victim to an alleged elaborate art fraud.
Now the Government’s Insolvency Service has stepped in and wound up the two companies behind this alleged scam, in which people were persuaded to invest in works of art by renowned painters.
Both of the companies involved came to the attention of the Insolvency Service after scores of complaints were received. Bizarrely, the trail did not lead them to the world’s art capitals of London, Paris, New York, Tokyo or Berlin – but to a small Welsh mining village and backwater street in the West Midlands.
The Insolvency Service wound up both companies in the public interest – Halifax Mannin Ltd, based in Blaenau Ffestiniog, Wales; and Birmingham’s Hey Design Services Ltd. The petitions were presented under s124A of the Insolvency Act 1986. The Official Receiver has been appointed liquidator of both companies.
According to the Insolvency Service, as much as £1.4m been invested. The vast majority of the money received by the two companies had been paid out of the companies’ bank accounts, but the Insolvency Service investigators could not determine how the funds have been spent, as they say the directors have failed to co-operate with enquiries.
After the Insolvency Service probe, the courts wound-up both companies on the grounds they traded with a lack of commercial probity, having been incorporated or used as vehicles for fraud, with their sole purpose being to receive monies from investors who were misled or bullied into making an investment. Furthermore, the companies and their directors failed to cooperate with the Insolvency Service investigation and the companies operated with a lack of transparency.
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.”
The role of the Insolvency Service is to administer compulsory company liquidations and personal bankruptcies and deal with misconduct through investigation of companies and enforcement. It also makes redundancy payments in cases where a company is insolvent. Insolvency Service staff are based across the UK in a network of 38 Official Receiver offices throughout England and Wales, including Leeds and Newcastle.
For more information about the work of our licensed insolvency practitioners and businesses recovery teams in Leeds, Bradford, Harrogate and Darlington, please call us on 03300 244 660 or email firstname.lastname@example.org