RegulationJul 14 2020

Car parking £25m investment scheme wound up

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Car parking £25m investment scheme wound up

Two companies which raised more than £25m by persuading members of the public to invest in parking spaces have been wound up by the courts. 

Aston Darby Group Limited and Drake Estates Property Company Limited were wound up at the beginning of the month at the High Court in Manchester, following years of convincing investors their funds were being used to buy car parking spaces close to airports for around £25,000 each. 

The companies promised returns of between 8 and 11 per cent to customers in the first two years of the investment, but in reality this guaranteed return was paid using original funds rather than income generated by the car parks. 

According to an investigation by the Insolvency Service, between October 2016 and December 2019 the companies sold around 456 car parking spaces at a site in Manchester for almost £11.5m.

Aston Darby Group also sold more than 630 car park spaces at a site in Glasgow between April 2017 and December 2019, brining in more than £14.3m in investor funds.

The Insolvency Service warned the schemes had made misleading claims in their marketing brochures, with documents claiming the sites were already generating yields of 8 per cent but failing to make clear the companies did not actually own the parking sites when initial sales were made.

David Hope, chief investigator for the Insolvency Service, said: "These two companies unscrupulously secured millions of pounds worth of investments from members of the public using misleading sales tactics.

"The court rightly recognised the potential damage done to investors by Aston Darby Group Limited and Drake Estates Property Company Limited selling a flawed business model and has acted swiftly to shut the companies down."

Investors were allegedly misled into believing planning permission had been granted for one of the sites and their funds would be used to buy a parking space, but in reality 50 per cent of their investments were used to fund commission and other charges by the companies.

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