An investment company has been wound up after using high-pressure sales techniques to encourage members of the public to invest in fine wines that were never bought.
Global Wine Exchange Limited was wound up on March 22, according to the Insolvency Service, and the official receiver has been appointed liquidator of the company.
The company offered would-be investors the opportunity to invest in fine wines with the promise of “significant” returns, cold-calling potential clients and using high-pressure sales techniques.
Several customers were vulnerable or elderly, and the Insolvency Service said one was reportedly suffering from Alzheimer’s.
The company also targeted investors in a separate wine scheme with Management & Consulting Partners, trading as the Bordeaux Wine Company, which entered liquidation in August 2021.
Global Wine Exchange told these customers it could help to recover their funds in return for a fee.
However these returns were never made, with customers reporting that they were asked to falsify records so Global Wine Exchange could make a false claim to the liquidator of the Bordeaux Wine Company.
Customers complained to the Insolvency Service, and highlighted how they often did not receive their wine, were misinformed where it was being stored, and said ownership certificates were “vague”.
Two of the three bonded warehouses where customers’ stock was allegedly being stored never had a contractual relationship with the company.
Furthermore, customers often paid more than the retail value of the wines and paid funds into a series of different bank accounts, some of which were not in the company’s name.
Investigators have only been able to identify wine stock purchases of £770,000 compared with income of £1.9mn between January 2019 and March 2021.
Between July 2019 and May 2020, the company received £1mn in payments. Of that, £600,000 was paid to the director and sales consultants, and £333,000 was used to purchase wine.
Edna Okhiria, chief investigator for the Insolvency Service, said: “During our investigations, we found that the Global Wine Exchange carried out unscrupulous acts of misconduct.
“The company misled many investors, some who were elderly or vulnerable, who did not receive the high returns they were promised.
“The courts have recognised the severity of Global Wine Exchange’s action and put a stop to anyone else becoming a victim of their investment scheme.”
sally.hickey@ft.com
