14-year ban for boss of failed Brazilian social housing investment
10 May 2019
The boss of a company that offered investment opportunities in Brazilian social housing, but which collapsed owing investors £21m, has been banned for 14 years after misleading his clients and failing to account for several millions of pounds of transactions
10 May 2019
Anthony Armstrong-Emery failed to appear at the High Court and the disqualification order was handed down in his absence.
The court heard that Armstrong-Emery, who has links to Gibraltar, and his colleague, Charles Fraser-Macnamara, from Halesowen, West Midlands, were directors of Ecohouse Developments Ltd.
Incorporated in May 2010, the company offered investments in the construction of social housing in Brazil, under the ‘Mihna Casa, Mihna Vida’ scheme. Investors would typically pay £23,000 per unit and would expect to receive their capital plus a 20% return 12 months later.
People were encouraged to invest by marketing literature and contracts that claimed Ecohouse owned the land the social housing was being built upon and the investment was secure. Investors were also told the exit strategy was backed by the government and Ecohouse was an approved supplier.
In May 2013, however, concerns about the company were posted online and by January 2015, Ecohouse Developments was placed into liquidation as it could not pay its debts, owing more than 350 investors around £21m.
The liquidation triggered an investigation by the Insolvency Service into the company and the conduct of its directors.
While Fraser-Macnamara, a solicitor who has since been struck off, elected to provide a disqualification undertaking for nine years for his misconduct in running the company, Armstrong-Emery chose to dispute the allegations.
However, the court upheld there was no evidence to show Ecohouse owned the land or had the right to ensure that any land owned by a third party should be transferred to it and that marketing materials were misleading and inaccurate.
The court also heard that the two directors had caused Ecohouse to maintain inadequate accounting records and did not deliver these to the liquidators.
As a result, the liquidators were unable to explain several substantial transactions, including payments to Armstrong-Emery worth more than £450,000, foreign payments totalling just over £11m, credit card payments worth over £1m and payments to a connected company worth £2.8m.
Cheryl Lambert, chief investigator for the Insolvency Service, said: ‘Members of the public thought they were getting a great deal but were unfortunately tricked into investing into a company that provided false and misleading information.
‘The evidence against the directors was substantial and while Anthony Armstrong-Emery thought he could evade our enquiries as he lived abroad, the court action is testament that we will take robust action against directors who disregard their obligations.’