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UK Courts Wind-Up Companies in IT Procurement Fraud Scams

March 26, 2020

Five companies involved in a scam to inappropriately obtain finance under the ruse of purchasing IT equipment have been wound up in court.

Five companies have been wound up in the public interest on 19 March 2020 at the High Court in Manchester before Deputy District Judge Carter. The Official Receiver has been appointed liquidator of Continental Meat Products Ltd, Fine Car Hire Ltd, Exclusive Worldwide Products Ltd, HSB Trade Ltd and Premier Snax Ltd.

In considering the petitions to wind-up the companies, the court heard that the Insolvency Service became aware of the five companies after investigating and taking enforcement action against two associated companies: Direct United (Services) Ltd and Bradwell Communications Ltd.

Following confidential enquiries, investigators established that the five companies had been involved in a scam where they inappropriately obtained, or attempted to obtain, finance under the premise of leasing IT equipment.

Continental Meat Products and Fine Car Hire secured lease agreements totalling just over 134,000 to pay for the leasing of IT equipment that was supposedly to be sourced from Premier Snax.

However, when Exclusive Worldwide Products and HSB Trade made attempts to obtain finance using similar tactics the finance company became concerned about all the applications it had processed and declined the latter two applications.

Having been unable to confirm the existence of any IT equipment, the Insolvency Service submitted petitions to the courts on 24 January 2020 to take action against the five companies.

At the hearing of the petitions, the Court wound up the companies on the grounds that all five companies had been abandoned, showed a lack of stewardship and transparency and had failed to cooperate and maintain or deliver up adequate accounting records.

The court also accepted that all five companies had acted with a lack of probity, were used as vehicles for fraudulent trading and that all, with the exception of Premier Snax, had filed false and misleading accounts at Companies House to create a misleading impression of their financial health.

David Hope, Chief Investigator for the Insolvency Service, said:

All five companies have been used as part of an orchestrated and cynical attack on finance companies to extract funds in a wholly inappropriate manner, all while using similar activities to connected companies we had previously taken action against.

By closing these companies down the court has protected other lenders from their actions and this demonstrates we will act robustly to protect legitimate businesses and prevent such abuse from taking place.

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