Wine investment scheme closed after ‘frittering away’ funds
UK-based investment firm Intercontinental Wines Ltd has been wound up in the public interest after ‘frittering away’ investors’ money on personal expenditure, said UK government officials.
Intercontinental Wines Ltd made sales worth £460,000 between March 2015 and February 2017, but only purchased £100,000 worth of wine, said the Insolvency Service today (3 December).
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On 23 November, the UK’s High Court ruled in favour of the service’s winding up petition against the company, which had a registered address of Threefield House, Threefield Lane, Southampton but vacated these premises in March 2018 without informing customers or authorities.
‘Intercontinental Wines enticed customers with the promise of attractive returns from building a portfolio of fine wines, entrusting the company to make purchases and store wines at bonded warehouses on their behalf,’ said Irshard Mohammed, senior investigator and case manager at the Insolvency Service.
‘However, the company blatantly failed to do so in the vast majority of sales made and instead took customers’ funds on face value, frittering it away on unexplained or personal expenditure.’
Claiming to be a wine broker, the firm used ‘high pressure cold calling methods’ to persuade would-be wine investors to part with their money, the High Court heard.
Clients were also told that wines would be stored in bond in personal accounts. When investigated, only 10% of clients had wine stored such a way, the Insolvency Service said.
It added, ‘The company failed to provide records of customers’ purchases and it was only later when investigators obtained the banking records, were they able to evidence that only a small proportion of sales proceeds were used to purchase wine. Instead, the company’s bank accounts were used for personal expenditure.’