Property firm Minerva Development Group has been wound up after the High Court decided its investment-raising activities, which saw at least £2.85m of investors’ funds disappear, were “entirely without substance”.
The firm was incorporated in January 2016 and traded from 2018 until late last year, offering potential investors residential property and student accommodation bonds with returns of between 7% and 16.9% per annum. Marketing was carried out primarily through two websites.
Investigators for the Insolvency Service discovered 70 investors had given Minerva £2.85m by paying into a range of non-company bank accounts, escrow accounts and pre-paid cards.
These investors were informed that their investments would be made secure through a “security trustee” which would oversee the application and banking of funds.
However, the accounts were found not to be secure and the alleged security trustee, first a company called Glaxicon Ltd and then Cohesion Business Development, provided no protection.
Investigators found that despite claiming to be an experienced financial services provider and a tax and accounting firm with more than 30 employees globally, Cohesion Business Development never had an official presence at its registered office, 11 Bruton Street, W1J.
In fact, neither Minerva Development Group or Cohesion Business Development were authorised by financial regulators.
Investigators were also concerned the appointed directors of the two firms – Simon Phipps and Paul Edwards of Minerva and Paul Redford at Cohesion – were likely fictitious or hijacked names to hide identities.
Investors had previously complained to the police stating that no investment returns had been made and no correspondence had been received from the company.
Subsequently, Minvera’s website was shut down, but investors were then approached by several recovery agents promising to get back their investments for an advanced fee. These agents were found to be illegitimate.
David Hill, chief investigator for the Insolvency Service, said: “Minerva Development Group persuaded clients to part with substantial sums of money to invest in property bonds with the promise of extremely generous returns. In reality, this was nothing but a scheme and our investigations found that no funds were invested into bonds but instead used to benefit those running Minerva Development Group and a connected company, Cohesion Business Development.
“The courts recognised the severity of the companies’ misconduct and closed them down to protect any further investors coming to harm. We urge potential investors to carry out rigorous due diligence to ensure they use their funds on legitimate investments.”
The winding-up orders were made before Insolvency and Companies Court Judge Prentis. The Official Receiver has been appointed as liquidator and any enquiries regarding the company should be made to it.
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