Investment directors’ 11-year ban over missing £11m
26 Feb 2020
Two directors of a property investment scheme, which left over 200 investors owed more than £11m, have been banned for a total of 22 years following an Insolvency Service investigation
26 Feb 2020
Kevin Neil and Peter Shuttleworth’s misconduct came to the attention of the Insolvency Service after the company they were directors of, Colonial Capital Group, entered into liquidation in February 2018.
Based in Chelmsford, Essex, Colonial Capital Group was incorporated in February 2014. Insolvency Service investigators discovered that the company invited investors to subscribe to bonds with the incentive of a 12% fixed interest rate per annum.
Bond holders were told their payments would be invested into Colonial Capital Group, who would then forward the funds to a connected American company over whom Colonial Capital Group would hold security.
The American company would use the money to buy and renovate distressed properties in the US and once the properties were renovated, they would be rented out or sold. Income secured from rents or proceeds of the sale would then be passed back to the bond holders.
Between February 2014 and March 2017, Colonial Capital Group secured just over £9m from bond holders.
However, investigators found that no funds were invested into the connected American company over whom Colonial Capital Group would hold security.
Instead £6.6m was paid, via an unsecured loan, to a separate company in the UK that shared the same directors as Colonial Capital Group. A further £2.3m was paid to a separate connected American company over whom Colonial Capital Group held no security.
Enquiries found that Colonial Capital Group had 244 investors and they are owed approximately £11m, which includes unpaid interest due.
Dave Elliott, chief investigator for the Insolvency Service, said: ‘Whenever anyone injects funds into an investment opportunity, at some point they will want to see some form of returns.
‘However, these unsuspecting victims saw no returns on the millions they invested and instead Kevin Neil and Peter Shuttleworth used the funds to pay other connected companies.
‘Eleven year bans are substantial disqualifications, severely curtailing the ability of Kevin Neil and Peter Shuttleworth from running companies, and should serve as a stark warning to other directors that they should not attempt to hoodwink their investors.’