A total of 19 firms involved in the sale of worthless carbon credit investments have been closed down in the past 15 months following investigations by the Insolvency Service.
The nineteen companies received almost £24 million from around 1,500 people who invested in the carbon credit or Voluntary Emission Reductions (VERs) believing them to be lucrative investments. In many instances the companies involved targeted elderly people in the 50 to 85 age range and in one instance, a 94 year old man.
Investors were told they would receive considerable returns by selling the credits to large national organisations who would then have the right to emit one tonne of carbon dioxide. Hard- selling techniques were deployed by high pressure salespeople who would convince investors that not only would they make vast returns on their investment but would be helping the environment at the same time.
Whilst there is a market in Vers or Cers (Certified Emission Reductions), they are only usually traded in huge volumes and there is no viable market in the volume levels held by individuals who have invested their savings through rogue investment companies.
Investors would be told they could expect returns of up to 42 per cent. The expected return was based on an out of date news article published 3 years ago.
The announcement that the companies had been wound up in the public interest was made by Jo Swinson, Minister for Employment Relations and Consumer Affairs in the Department for Business Innovation and Skills. The Minister described the trade as a “particularly contemptible scam as it not only preyed on older people but also targeted their sincere desire to make ethical investments.” Jo Swinson goes to say that the shares are “either worthless or do not exist.”
The Insolvency Service investigating officer, David Hill, said that the company directors were unable to provide any evidence of the worth of the investments and “that anyone who fell for their slick patter was likely to end up losing out.”
One of the companies, Eco Global Markets Limited, took more than £8.5 million from around 230 investors, more than a third of whom were over 70 years of age.
The Insolvency Service say that there has been a significant increase in the number of companies entering this fraudulent market over the past year or so and they remain committed to investigating their trading conduct, closing them down and holding the directors to account. To date, two directors have been disqualified from acting as company directors and enforcement action will be considered against any director that the Insolvency Service believes to have acted improperly.
Investors in such schemes, whilst perhaps feeling embarrassed, are invited to report the matter so that action can be taken.