The High Court has banned the boss of a company that offered investment opportunities in Brazilian social housing for 14 years after misleading his clients.
Anthony Jon Domingo Armstrong-Emery, who has links to Gibraltar, and his colleague, Charles Valentine Fraser-Macnamara, from Halesowen, West Midlands, were directors of Ecohouse Developments, according to the Insolvency Service.
Incorporated in May 2010, Ecohouse Developments 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 per cent return 12 months later.
People were encouraged to invest by marketing literature and contracts that claimed Ecohouse owned the land the social housing was being built upon and the investment was secure. Investors were also told the exit strategy was backed by the government and Ecohouse was an approved supplier.
In May 2013, however, concerns about the company were posted online and by January 2015, Ecohouse Developments was placed into liquidation as it could not pay its debts, owing more than 350 investors around £21m.
The liquidation triggered an investigation by the Insolvency Service into the company and the conduct of the directors.
While Fraser-Macnamara, a solicitor who has since been struck off, elected to provide a disqualification undertaking for nine years in January 2017 for his misconduct in running the company, Armstrong-Emery chose to dispute the allegations.
The High Court handed Armstrong-Emery a disqualification order on 15 March 2019. Armstrong-Emery is banned for 14 years from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.
The High Court ruled 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 that marketing materials were misleading and inaccurate.
The court also heard that the two directors had caused Ecohouse to maintain inadequate accounting records and did not deliver these to the liquidators.
As a result, the liquidators were unable to explain several substantial transactions, including payments to Armstrong-Emery worth more than £450,000, foreign payments totaling just over £11m, credit card payments worth over £1m, and payments to a connected company worth £2.8m.
Insolvency Service chief investigator Cheryl Lambert says: “Members of the public thought they were getting a great deal but were unfortunately tricked into investing into a company that provided false and misleading information.
“The evidence against the directors was substantial and while Armstrong-Emery thought he could evade our enquiries as he lived abroad, the court action is testament that we will take robust action against directors who disregard their obligations.”