A London company that offered the public the opportunity to invest in carbon credits or diamonds has been ordered into liquidation in the High Court, following an investigation by the Insolvency Service and video-linked court evidence from investors.
Mulberry Wynford Ltd claimed to be headquartered in the City of London’s financial district and to also have offices internationally, making it uniquely positioned to take advantage of “current global economic trends and maintain a truly global presence for its clients”.
The company’s management team was claimed to have more than 150 years combined industry experience providing unparalleled expertise to its selective commercial, private and high net worth clients across a wide range of products and services.
The court heard that far from having the expertise claimed and a global presence the reality was limited mail forwarding services at its City of London serviced office registered address and two recorded directors Michael Bashir, aged 37, and Andreas Christodoulou, aged 25.
The company vigorously opposed the winding up action and was initially legally represented, but latterly Mr Bashir and Mr Christodoulou instead both represented the company.
At the trial, High Court deputy registrar Garwood admonished them both for their “Chuckle Brothers” approach in presenting the company’s defence.
Whilst the company initially asserted that it had not sold carbon credits to the public for investment, the court heard how the company had nevertheless purchased “pre-qualified data” from an investor sales leads company and that it had undoubtedly sold carbon credits to members of the public.
Evidence was heard from three investors, one UK investor in person and two by video link from County Cork, Ireland and Johannesburg, South Africa.
The court heard how the company had recorded its “compliance” calls to investors, but not its sales calls because “of the hundreds of sales calls it made”.
The company’s terms of business disclaimers together with its ‘compliance’ calls to investors were found to be no more than a “cover your back” arrangement that essentially advised investors that nothing they had read or been told by the company was true.
The extent of the overall losses to investors is presently undetermined, but an official receiver has now been appointed to administer the winding up of the company.
Chris Mayhew, company investigations supervisor, explained the company came to their attention after having supplied carbon credits to Windward Capital Limited, a company that was ordered to close in the public interest earlier this year.
The credits were ostensibly bought for £300 each as part of Windward Capital’s corporate social responsibility objectives to off-set its own carbon footprint.
“Why a company selling carbon credits to the public at inflated prices would itself turn to another sales company for credits in order to voluntarily off-set its carbon emissions and pay 115 times the price that Mulberry Wynford paid for the credits could not be credibly explained to the court,” he noted.
“The arrangement was clearly contrived to mask Mulberry Wynford’s participation in, and benefit from, Windward Capital’s unscrupulous operations to sell carbon credits to the public for investment, a business which Mulberry also separately carried on despite its assertions otherwise.”
The Insolvency Service warned it will not allow rogue companies to rip-off vulnerable and honest people and will close down companies if they are found to be operating or about to operate against the public interest.
As well as ordering the company into liquidation, deputy registrar Garwood also listed the case for a further hearing to decide whether the directors of the company should be made personally responsible for the costs which have been incurred in the case.
That hearing will take place in the next few months.
The company’s most recently filed accounts for the period from 1 September 2013 to 30 September 2014 report no assets, liabilities of £6,731 and accumulated losses of £6,732.
peter.walker@ft.com
