£69m landbank scheme closed
High court winds up illegal landbank scheme
Wednesday, 04, Jun 2008 11:42
An illegal landbank scheme that hit 4,500 investors for £69 million has been shut down.
The financial services authority has asked the high court to wind up a firm called UKLI for operating as an illegal 'collective investment scheme' (CIS) and denying its investors protection for their money.
UKLI, the UK's largest landbank firm, offered investors a 'collective investment scheme' whereby they bought plots of land under the promise planning permission would be granted and then large profits could be made once they were sold to developers.
The scheme was deemed to be illegal as it was not authorised by the FSA and so investors are not entitled to make a complaint to the Financial Ombudsman Service or to claim compensation from the Financial Services Compensation Scheme.
Jonathan Phelan, head of retail enforcement at the FSA, said: "People invest to provide a better life for themselves and their families. The FSA will not hesitate to pursue companies like UKLI which offer unauthorised and illegal services which put such investments at unnecessary risk.
"We will continue to do everything possible to keep people safe from illegal schemes that deny them their right to complain and get compensation when things go wrong."
He added the action should serve as a warning to other companies that might be breaking the law in this way.
Administrators of UKLI have now been appointed and are in the process of contacting all investors who have bought land with more information on what will happen next.
Daniel Barnes