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20th May, 2019 by Morris Peacock
Court bans boss of a company that offered investment opportunities in Brazilian social housing for 14 years after he misled his clients.
On 15 March 2019, Insolvency and Companies Court Judge Briggs handed down a judgment disqualifying company director Anthony Jon Domingo Armstrong-Emery from being involved in the promotion, formation or management of a company for a period of 14 years.
At trial, the Court heard that Mr Armstrong-Emery, who has links to Gibraltar, and his colleague Charles Valentine Fraser-Macnamara, a former solicitor from Halesowen, West Midlands, were directors of Ecohouse Developments Ltd, a company which was incorporated in May 2010 and which offered investments in the construction of social housing in Brazil, under the ‘Mihna Casa, Mihna Vida’ scheme.
Investors would typically pay £23,000 per unit and would expect to receive their capital plus a 20% return 12 months later.
People were encouraged to invest by marketing literature and contracts that claimed Ecohouse owned the land that the social housing was being built upon and that the investment was secure. Investors were also told the exit strategy was backed by the Brazilian Government and that Ecohouse was an approved supplier to the MCMV scheme.
In May 2013, concerns about the company were posted online and in January 2015, Ecohouse was placed into liquidation as it could not pay its debts, owing more than 350 UK and overseas investors a total sum in excess of £21m. The liquidation triggered an investigation by the Insolvency Service (assisted by Howes Percival) into the company’s affairs and the conduct of the directors.
Whilst Mr Fraser-Macnamara, a solicitor who has since been struck off the Roll, elected to provide a 9 year disqualification undertaking in January 2017 for his misconduct in running the company, Mr Armstrong-Emery chose to dispute the allegations.
However, the Court found that there was no evidence to show Ecohouse owned the land or had the right to ensure that any land owned by a third party should be transferred to it and found that marketing materials were misleading and inaccurate including the statements that the exit strategy was backed by the Brazilian Government and that Ecohouse was an approved supplier to the scheme.
The Court also found that the two directors had caused Ecohouse to fail to maintain adequate accounting records or deliver these to the liquidators. As a result, the liquidators were unable to explain several substantial transactions, including payments to Mr Armstrong-Emery worth more than £450,000, foreign payments totalling just over £11 million, credit card payments worth over £1 million and payments to a connected company of £2.8 million.
For more information on how Howes Percival manages situations such as these, go to our Insolvency and Corporate Recovery page. To learn more about this case in particular, contact Morris Peacock.
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