Insolvency Service flattens landbanking company
Amberley Knight Ltd a land banking company in Milton Keynes which misled investors into buying plots of green belt land for property development, was wound-up in the public interest on 17 September 2013 in the High Court in Manchester, following an investigation by the Insolvency Service.
Between July 2007 and September 2013, Amberley Knight Ltd (“Amberley”), sold 97 plots of land at an average price of more than £7,700 apiece by targeting investors through cold calling and advertising on its website. This was from a total of 158 plots subdivided from a larger piece of land purchased from its director and an associate for £64,173.
Amberley marketed the land and exaggerated its experience, saying that its expert team provided clients with profitable land investment opportunities by identifying prime land sites across the UK with the potential for development.
However, the investigation discovered that:
The land being sold by Amberley was within the green belt and development was generally restricted under the Local Authority’s existing planning policies.
The company had contacted the Local Authority in general terms only, despite claiming that it had conducted thorough research indicating that the land was likely to obtain planning consent.
There was no evidence that Amberley had ever obtained professional advice on the likelihood of obtaining planning permission or the prospects for development.
Amberley operated from a single office and the director had no prior experience of buying and selling land.
It had no other members of staff beyond sales agents.
The claimed returns for investors were overstated and unrealistic.
In winding the company up, the court accepted the Secretary of State’s evidence that the business carried out by Amberley lacked commercial probity and that there was a lack of commercial benefit to its customers. The court also observed that customers thought that they were dealing with a company of vast experience, whereas Amberley actually had significantly less experience than it claimed.
Commenting on the case, Scott Crighton, Investigation Supervisor at the Insolvency Service, said:
”Directors of companies who set out to market investment opportunities to the public on the basis of false or misleading information should be aware that the Insolvency Service can and will take rigorous action to stamp out their activities.”