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Fine wine investment scheme shut down by the High Court

Time:2018-12-05 22:44wine - Red wine life health Click:

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Fine wine investment scheme shut down by the High Court

Fine wine investment scheme shut down by the High Court

By James Halliwell

Published:  05 December, 2018

Intercontinental Wines Limited has been wound up by the High Court following a series of complaints by customers.

The court heard Intercontinental Wines used high-pressure cold calling tactics to target the public. During the calls, potential investors were assured their investments would generate profitable returns. They were also told cases of fine wine would be stored in bonded warehouses under personal accounts.

However, customers complained that the business ignored queries, such as the safe holding of wines supposedly purchased on their behalf.

Subsequent complaints were made to the Insolvency Service, which investigated and found that Intercontinental Wines only made purchases for a small percentage of customers and not according to its contractual requirements to do so for all of them.

It also found that only around 10% of customers had cases of fine wine stored in bonded warehouses under personal accounts and that bank records and financial statements showed wine purchased by the company was only worth a fraction of their sales by value.

Between March 2015 and February 2017 the company generated sales of over £460,000, while purchasing just only £100,000 worth of stock, meaning customers would need the value of the wine to increase by more than 400% to break-even.

The company also failed to provide records of customers’ purchases. When investigators obtained the banking records they were able to prove that only a small proportion of sales proceeds were used to purchase wine. Instead, the company’s bank accounts were used for personal expenditure.

The company also vacated its joint trading and registered premises in Southampton in March 2018 but failed to disclose this to customers or to the Registrar of Companies.

“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 & 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. These winding-up proceedings show that we will take firm action against companies that operate in such an unscrupulous way."

The company’s sole appointed director since it was incorporated in 2011 has been David Angel. The company was wound up on 23 November 2018 and the Official Receiver has been appointed as liquidator.



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