High Court shuts down investment firm that lost millions in investors’ capital

The High Court has shut down an investment firm after it failed to pay back millions of pounds of investors’ funds.

A winding-up petition was brought before District Judge Khan, presiding over the case in the Business and Property Courts in Manchester, in relation to UK Renewable Investments (AD) plc earlier this year.

According to the petition, the investment firm sold corporate bonds to 208 people between July 2015 and September 2016, worth approximately £2.5 million.

Investors were told that the capital would go towards developing “anaerobic digestion plants that generated renewable energy”. Under the terms of the investments, the bonds had a five-year term and were estimated to generate an interest rate of 11 per cent per annum, with interest payments made payable every six months after the first year.

However, court documents show that the majority of the capital was, in fact, loaned to a separate company, known as Bio Green Energy Ltd, to finance the construction of 15 anaerobic digestion plants in Northern Ireland. Accordingly, each plant was to be held in an individual special purpose vehicle (SPV) company owned by Bio Green.

Despite these protections, the projects were never completed and Bio Green entered into administration in May 2017.

This created a chain reaction in which the capital lent to Bio Green could not be repaid to UK Renewable Investments, meaning investors’ funds could not be returned.

Up until April 2019, the court found that just £14,000 in interest payments had been made available to bondholders.

Winding up UK Renewable Investments, Judge Khan said the company had traded with a “lack of commercial probity”.

UK renewable Investments was wound up by the court on 03 April 2019, with the Office Receiver appointed as liquidator.

Commenting on the report, David Hope, Chief Investigator for the Insolvency Service, said: “Despite accepting millions of pounds of investments from members of the public, the company failed to exercise appropriate governance and control over how those monies were spent.

“Unfortunately it is the investors who will suffer and this should serve as a warning that there are strict obligations companies need to adhere to when they raise money from members of the public.”