Latest carbon credit scam shut down - but will it make a difference?

Eco Business Management, a firm Money Observer has previously warned against doing business with, has been ordered to close by the High Court.

The firm was ordered into liquidation after an investigation found it mis-sold wildly overpriced carbon credits to investors, using high-pressure sales tactics and misleading statements.

Although investors were falsely told they could receive returns of up to 82 per cent within six months to two years, in some cases their carbon credits were actually being retired (cancelled) without their knowledge.

Investors pursuing the firm for news about their investments - including several people who spoke to Money Observer - were falsely told the firm had entered liquidation.

VEIL OF DECEPTION

The company operated under a multi-layered veil of deception - claiming to be in liquidation to some investors while actively selling to others, and filing 'dormant' accounts with Companies House (implying the company was not trading) while still pursuing unwary investors.

It claimed to investors that it was 'covered' by the Financial Conduct Authority (FCA), implying that investments had some level of protection that did not in fact exist.

Eco Business Management is related to Eco Asia Carbon Consultancy - a firm on the FCA's scam firm warning list.

Chris Mayhew, company investigations supervisor at the Insolvency Service, says: 'The company claimed to be an organisation that treasures its role as a leader in the carbon finance industry but in reality was an eco con on investors cutting their savings not pollution.'

Although the closing down of Eco Business Management is good news in theory, it means relatively little to those whose money has already been whisked away to offshore bank accounts.

NO REPERCUSSIONS

It also likely means very little in terms of personal consequences for any of the individuals involved. Because Companies House requires no proof of identification or address to register a company, there is nothing stopping the individuals behind this scam from going to ground for a time, only to start up a new illegitimate firm and continue separating savers from their cash.

Various authorities, including the police and the Insolvency Service, have told Money Observer that the process of actually bringing an individual to account - including any criminal charges - is made all the more difficult by the uncertainty of directors' real names and whereabouts.

Companies House told Money Observer previously that it was considering introducing tougher checks, but at time of writing plans have not progressed past that stage.

In May of last year a High Court ordered the liquidation of 13 companies that together raised more than £19 million selling carbon credits at exaggerated prices. These included firms set up by David White, a broker who also sold carbon credits for Eco.

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