The Financial Services Authority (FSA) has secured High Court winding-up orders against two UK firms, Bio Partners Limited (Bio Partners) and Zambia Alpha One LLP (Zambia Alpha).
The two firms operated a collective investment scheme which invested funds in the farming of a bio-fuel crop in Africa but neither was authorised by the FSA to do so. The scheme took in almost £1 million from UK investors.
The FSA gave the management of Bio Partners and Zambia Alpha ample opportunity to present a satisfactory alternative solution and produce evidence that the scheme was being managed competently.
No such solution or evidence was presented however so in the interest of consumer protection the FSA served petitions to the Court on 15 November 2010, which were heard and determined on an expedited basis on 8 December 2010.
Collective investment schemes allow a group of investors to pool their assets with a view to sharing the profits. Participants do not have day to day control over the management of the assets, something that must be carried out by an FSA authorised operator.
Margaret Cole, the FSA’s managing director of enforcement and financial crime, said:
"If things go wrong for people who’ve invested with an unauthorised business they rarely get any money back because the firms are not covered by the Financial Services Compensation Scheme.
“The FSA has a sharp focus on consumer protection and we are determined to do all we can to protect consumers from the perils of unauthorised business. Anybody considering whether to invest in agricultural or crop schemes like this should only deal with FSA authorised firms.
"Operating a collective investment scheme is a serious business requiring FSA authorisation. Without the proper authorisation, neither Bio Partners or Zambia Alpha had any business running one of these schemes and put investors' money at risk."
Anybody who invested in the scheme should now contact the Public Interest Unit of the Official Receiver's Office (piu.or@insolvency.gsi.gov.uk) for information as to next steps in the insolvency process.