The investigation found that GLE & International Property Ltd sold plots of land to members of the public for investment purposes on a false and misleading basis. It claimed that developers would then apply for planning permission and purchase the entire site, thereby resulting in substantial profits for the investors.
The company sold plots of land on sites in Burnley and Ormskirk in Lancashire and Cheshunt in Hertfordshire.
GLE & International Property Ltd purchased plots on the Burnley site at 拢2.85 per square foot and immediately re-sold them to investors at 拢7 - 拢8 per square foot. Between August 2010 and November 2010 the company sold a total of six plots with an aggregate sales value of 拢70,440.
The company purchased plots on the Ormskirk site at 拢4.75 per square foot and immediately re-sold them to investors at 拢12 - 拢14 per square foot. Between December 2010 and February 2011 the company sold a total of seven plots with an aggregate sales value of 拢99,952.
In respect of the Cheshunt site, the company purchased the plots at 拢2.45 per square foot and immediately re-sold them to investors at 拢12 per square foot. Between May 2011 and November 2013 the company sold a total of 74 plots with an aggregate sales value of 拢866,100.
The investigation found that none of the sites had been developed and that no applications for planning permission had even been made. Enquiries made of the relevant Local Authorities established that the respective sites were within designated green belt areas and were thus highly unlikely to be granted planning permission for development. Indeed, Broxbourne Council had issued a press release in February 2012 headed 鈥楲and Scam in the Hammondstreet Area of West Cheshunt鈥� warning against investment in the Cheshunt site, stating: 鈥淭he Council 鈥�. would like to make the following points clear: firstly, the land in question is in the green belt, where national planning guidance and local planning policies make it clear that there is a strong presumption against development. Secondly, the land in question is not allocated for development and does not have planning permission for any form of development.鈥�
West Lancashire Borough Council had issued a press release in similar terms in August 2010 when it became aware that plots of land were being sold on the Ormskirk site.
The Cheshunt plots of land were purchased by GLE & International Property Ltd from JDG Properties Ltd and the purported developer of the site was Tithebarn Trading Ltd. JDG Properties Ltd had purchased the land at 拢0.33 per square foot. It then sold plots of the land to GLE & International Property Ltd at 拢2.45 per square foot and GLE & International Property Ltd had immediately sold them on to the investors at 拢12 per square foot. The investors were told that Tithebarn Trading Ltd, would buy their plots at 拢52.43 per square foot subject to planning permission having been obtained. Investors were not told that JDG Properties Ltd and Tithebarn Trading Ltd were under common ownership and control.
The investigation found no commercial or legitimate reason why Tithebarn Trading Ltd would be prepared to buy back the plots at 拢52.43 per square foot when its associated company, JDG Properties Ltd, had sold them (via GLE & International Property Ltd) at 拢2.45 per square foot.
JDG Properties Ltd and Tithebarn Trading Ltd were previously wound up on 3 July 2015 on the grounds that they had operated against the public interest.
Insolvency Service investigation supervisor Colin Cronin said: 鈥淎s invariably happens with landbanking cases of this type the only people who profited from the company鈥檚 trading were those involved in the sale of the land to investors and those who recruited or otherwise introduced investors to GLE & International Property Ltd and who received significant commission payments for doing so.
鈥淭he plots of land were sold to investors on the false basis that there were developers waiting in the wings to obtain the necessary planning permission and to develop the land, something which would result in a substantial uplift in the value of the plots. The reality is that there were no arrangements with genuine developers in place and no steps were ever taken to apply for planning permission.
鈥淭he net result is that investors have paid highly inflated prices for plots of land which they are powerless to deal with on an individual basis.鈥�
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