A company that was found to have misled customers to invest in fine wines has been wound up in the High Court.
Intercontinental Wines Limited was wound up in the public interest at the High Court on November 23, after the court heard the company, which had claimed to be a wine broker, had used client funds for personal expenditure.
According to the Insolvency Service, a government-sponsored executive agency, Intercontinental Wines had used high-pressure cold calling to target members of the public.
Customers were told investments in wine were secure and resulted in profitable returns and the cases would be stored in bonded warehouses under personal accounts.
However, an investigation by the Insolvency Service found only about 10 per cent of customers had cases of fine wine stored in bonded warehouses under personal accounts.
It also found Intercontinental Wines had only made purchases for a small percentage of paid customers on an apparently ad hoc basis and not according to its contractual requirements.
The firm's bank records and financial statements showed wine purchased by the company was only worth a fraction of their sales by value.
In a two-year period between March 2015 and February 2017 the company made sales of more than £460,000, while purchasing a mere £100,000 worth of stock, the Insolvency Service stated.
It added this meant customers would have needed the value of the wine to increase by more than 400 per cent to at least break-even.
Meanwhile, instead of investing, the company’s bank accounts were used for personal expenditure, the agency found.
Irshard Mohammed, senior investigator and case manager at the Insolvency Service, said: "Intercontinental Wines enticed customers with the promise of attractive returns from building a portfolio of fine wines, entrusting the company to make purchases and store wines at bonded warehouses on their behalf.
"However, the company blatantly failed to do so in the vast majority of sales made and instead took customers’ funds on face value, frittering it away on unexplained or personal expenditure."
The company, which was incorporated in 2011, vacated its joint trading and registered premises in Southampton in March 2018 but failed to disclose this to customers or to the Registrar of Companies.
The Official Receiver has now been appointed as liquidator.
Mr Mohammed said: "These winding-up proceedings show that we will take firm action against companies that operate in such an unscrupulous way."
Dealings at the firm came to light after clients began to complain about its failure to respond to queries about the wines supposedly purchased on their behalf.
The Insolvency Service stated the company had failed to provide records of customers’ purchases and it was only when investigators obtained the banking records, that they were able to evidence that only a small proportion of sales proceeds were used to purchase wine.