A company which sold investments in renewable energy plants has been wound up by the courts after it failed to pay back £2.5m of investor funds.
The Business and Property Courts in Manchester shut down Darlington-based UK Renewable Investments (AD) plc on April 3, after hearing it sold corporate bonds to 208 people between July 2015 and September 2016.
Investors were told their funds would go towards developing plants which generated renewable energy and bonds would generate an interest rate of 11 per cent per annum over a five-year term.
The company promised interest payments to be paid every six months after the first year and the bonds were to be redeemed in full at the end of the five-year term.
But the majority of the £2.5m raised was loaned to a separate company, Bio Green Energy Ltd, to pay for the construction of plants in Northern Ireland, the Insolvency Service found.
But the plants were never completed and Bio Green Energy was placed into administration in May 2017.
As a result, the company could not repay the capital and interest rates owed on its loan from UK Renewable Investments and in turn bondholders were not paid their interest payments.
The court heard Bio Green had only paid loan interest to UK Renewable Investments totalling about £15,000, which in turn had only made interest payments to its bondholders of slightly more than £14,000.
In a statement released by the Insolvency Service today (April 8) it stated the court had accepted UK Renewable Investments traded with a "lack of commercial probity".
David Hope, chief investigator for the Insolvency Service, said: "Despite accepting millions of pounds of investments from members of the public, the company failed to exercise appropriate governance and control over how those monies were spent.
"Unfortunately it is the investors who will suffer and this should serve as a warning that there are strict obligations companies need to adhere to when they raise money from members of the public."