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FSA acts to close landbank scheme

The FSA has asked the HIgh Court to wind up landbanking company UKLI for operating as an illegal collective investment scheme.

The regulator has been granted an interim freezing and restraining order against UKLI to protect its assets for creditors, including investors.

UKLI sold plots of land to people by claiming it could get planning permission, which would increase the land’s value and bring a big profit once it was sold to developers.

Around 4,500 investors paid UKLI a total of £69m to buy land but none of the plots was granted planning permission.

The FSA says UKLI’s business was illegal because it operated as a CIS and should have been authorised.

Lee Manning and Carlton Siddle of Deloitte have been appointed joint administrators and are in the process of contacting all investors who have bought land from UKLI.

FSA head of retail enforcement Jonathan Phelan says: “The FSA will not hesitate to pursue companies like UKLI which offer unauthorised and illegal services which put such investments at unnecessary risk. Our action against UKLI should serve as a warning to other companies that might be breaking the law in this way.”

Informed Choice joint managing director Martin Bamford says: “The FSA could only act because UKLI was operating as a collective investment scheme which needs to be regulated. I am not sure this will lead to more enforcement action against these companies.”

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