Two Cheshire-based directors of a care home investment scheme, which owed investors over £13mn, have been banned for a total of 25 years.
According to a statement for the Insolvency Service, Christopher Bateman and his business partner Nicola Fairweather had promised investors fixed returns of 10 to 30 per cent if they invested in the scheme.
However, an investigation found that the funds had been received through deception.
Chief investigator for the Insolvency Service Robert Clarke said many investors were regular people who were not familiar with investments and were “duped to transfer money from their hard-earned pensions”.
“Our thorough investigations uncovered extensive abuse of investors who have lost millions of pounds through Bateman and Fairweather’s deceitful activities,” Clarke said.
The investigation was triggered when two connected companies that Bateman and Fairweather were directors of entered into insolvency proceedings in 2017 and 2018.
The first, GCC Management Limited, was an unregulated company that offered people the opportunity to invest in the purchase of care homes, while the second, Amek Soultions advised on and/or arranged GCC’s investments.
The Insolvency Service’s investigation found Amek solutions had broken the law as it did not have authority to encourage investments and it advised people, many unsophisticated investors, to transfer funds from their pensions.
The firm also failed to advise people to seek financial advice.
'Misleading and unrealistic marketing material'
The investigation found that Amek Solutions promoted GCC Management’s scheme to at least 133 people, who invested almost £6.3mn from their pensions. These funds were not protected under the Financial Services Compensation Scheme.
Amek Solutions received almost £5.4mn in commission from GCC Management for the promotion of the scheme.
At the time that GCC Management went into liquidation, investors were owed £13.2mn.
The Insolvency Service calculated that at least 243 investors placed more than £11.6mn into GCC, while 166 of these investors transferred more than £7.8mn from their existing pensions.
GCC was found to have produced “misleading and unrealistic marketing materials” based on a business plan “which lacked commercial viability”.
The investigation also noted that there were no mitigation plans to help investors if returns could not be made and that GCC sent false information to investors about when their returns would be paid.
From the fund received “through deception”, GCC made unaccounted payments worth millions “that did not benefit the company or its investors”, according to the Insolvency Service.
It said: “This included £1.4mn paid to connected companies Bateman and Fairweather were directors of, and another £1.4mn to foreign exchange companies.”
By September 2012, GCC had only one operating care home that had generated income, which was much lower than expected.