FSA closes down illegal investment scheme

Published 04th Jun 2008

The Financial Services Authority has stepped in to close down a scheme that conned thousands of investors out of almost 70 million pounds.

The FSA has asked the High Court to wind up Britain's largest "landbanking" company, UKLI Limited.

It operated as an illegal collective investment scheme (CIS), advertising and selling plots of land in the promise that it could get planning permission and make investors a large profit once the land was sold on to a developer, the FSA says.

A total 4,500 investors paid the company 69 million pounds.
But none of the land sold was ever granted planning permission.

UKLI operated illegally because it was not authorised by the FSA, meaning investors were not able to complain to the Financial Ombudsman Service or to claim compensation from the Financial Services Compensation Scheme.

In the interim, the FSA has been granted an interim freezing and restraining order to stop UKLI from operating and protecting its assets for creditors.

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."

Deloitte has been appointed administrator of UKLI. It is in the process of contacting investors.

Jennifer Hill

Source: ' reuters '

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