The bosses of a £9m investment scheme which falsely promised investors a fixed rate interest of 12 per cent a year have been banned by a High Court judge.
Kevin Antony Neil, 57, and Peter Leonard Shuttleworth, 37, "dishonestly" secured funds from 244 investors under the pretence the funds would be invested in the American property market.
But in reality the money was predominately transferred to another company that the two men were directors of, with the victims now owed about £11m including unpaid interest.
In the High Court in London on February 11 Judge Burton banned each of the pair from being a company director for 11 years.
The misconduct of Neil and Shuttleworth was first flagged to the Insolvency Service in February 2018 when the company they directed, Colonial Capital Group PLC, fell into liquidation.
Investigators found Essex-based Colonial Capital Group had invited clients to invest in bonds with the incentive of a 12 per cent fixed interest rate per annum and had secured just more than £9m between February 2014 and March 2017.
Bond holders were told their funds would be invested in the American property market, used to buy and renovate distressed properties in the US.
Investors were told once these alleged properties were renovated and sold, they would receive the proceeds.
But investigators discovered no funds were invested as promised and instead £6.6m was paid via an unsecured loan to a separate company in the UK that shared the same directors as Colonial Capital Group.
A further £2.3m was paid to a separate connected American company over whom Colonial Capital Group held no security.
Dave Elliott, chief investigator for the Insolvency Service, said: "Whenever anyone injects funds into an investment opportunity, at some point they will want to see some form of returns.
"However, these unsuspecting victims saw no returns on the millions they invested and instead Kevin Neil and Peter Shuttleworth used the funds to pay other connected companies.
"The 11-year bans are substantial disqualifications, severely curtailing the ability of Kevin Neil and Peter Shuttleworth from running companies, and should serve as a stark warning to other directors that they shouldn’t attempt to hoodwink their investors."
rachel.mortimer@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
