The Department of Trade and Industry (DTI) has ordered the winding up of three Manchester-based property investment companies because they misled clients.
Europa Property Company, trading as Lloyd Ryan Properties, offered to help clients build up a property portfolio by finding houses in Lancashire and Yorkshire and then arranging for them to be renovated by Europa Buildings Northern – another company in the same group.
The company would then arrange to find tenants, allowing the investors to buy further properties in their efforts to build up a property portfolio. It claimed that clients could own up to 30 houses within two years.
The DTI said investors were led to believe that more than 50 estate agents were referring properties to the scheme for investment, but investigations found the majority of referrals came from just one company, Peachey Properties, another company in the same group.
Properties were often sold at prices far above their market value – often with a mark-up of 100%.
The DTI said the three companies were all run under the common control of an undischarged bankrupt.
Financial records for all three companies were incomplete but the DTI said it was clear that, despite taking around £700,000 from investors in 10 months of trading, many of the refurbishments had not taken place.
The investigators also found no evidence that any of the properties had been let to tenants.
References: EGi News 03/03/05
