Property investment companies liquidated
Rationale Asset Management PLC, Value Asset Management PLC and Merydion Corporation Limited have been ordered to liquidate after misleading investors and misappropriating funds, according to The Insolvency Service.
The property companies were wound up in the public interest on 12 January before ICC Judge Prentis.
The Official Receiver has been appointed liquidator of the companies.
Rational Asset Management had claimed to prospective clients that they purchased and developed property such as care homes, hotels and pubs to sell on for a profit.
Investigators discovered that Rational Asset Management had received more than £2m from investors.
However, Rational Asset Management only used a fraction of this money for property investments.
The vast majority of the money was used to pay the directors of Rational Asset Management and for other companies in which the directors had a controlling interest.
Enquiries found that Value Asset Management sold bonds to investors, which Value Asset Management claimed were secured against property assets.
Value Asset Management also sold shares with the promise that the capital raised would be used to invest in new properties.
An investigation into Value Asset Management found that its marketing materials were misleading and the company’s accounts showed that Value Asset Management was insolvent, owning no property.
Value Asset Management also received £200,000 from Rational Asset Management, which did not benefit Rational Asset Management’s property investors.
Looking to the third company involved, inquiries revealed that £300,000 of investments received by Merydion Corporation Limited was from the same pension scheme that Rational Asset Management had obtained funds from.
Funds were then used by Merydion Corporation to invest in hotel properties the director of the company owns under separate companies.
David Hill, chief investigator for the Insolvency Service, said: “These companies were entirely misleading to their investors, taking millions of pounds without making any genuine investments.
“There is no evidence that Value Asset Management ever commenced any property development projects and all of Rational Asset Management’s investors have been left with worthless shares.
“The courts recognised the severity of their misconduct and these companies have been wound up, putting a stop to this ongoing pattern of harmful business practices.
“We also urge anyone considering investments of this type that they should always take independent financial advice before doing so.”