Fraud investigation launched into Angelgate and New Chinatown
Update October 2021: The investigation has ended without any charges due to insufficient evidence.
The Serious Fraud Office has launched an investigation into three stalled developments in Liverpool and Manchester: Pinnacle’s Angelgate; and North Point’s New Chinatown and Pall Mall.
According to the SFO, which said it would not be commenting further on the investigation at this stage, a number of search warrants were executed on 17 January in conjunction with Merseyside Police, as part of a joint investigation with the North West Regional Organised Crime Unit.
The three projects being investigated are:
- Angelgate, Dantzic Street, Manchester – the developer is Pinnacle (Angelgate)
- North Point Pall Mall, 70-90 Pall Mall, Liverpool – the developer is North Point (Pall Mall)
- New Chinatown, Liverpool – the developer is China Town Development Company, a North Point Global special purpose vehicle
Angelgate in Manchester was set to feature a £77m, 344-scheme of two towers, while New Chinatown included 800 apartments, 120,000 sq ft of offices, and a 140-bedroom hotel.
North Point’s Pall Mall site had been promoted as a £90m, 366-apartment scheme designed by Blok Architecture.
Both Angelgate and New Chinatown ground to a halt in 2016 after the collapse of contractor PHD1.
In the case of Angelgate, which entered administration in 2017, buyers of the apartments are set to lose a total of £23.7m, with unsecured creditors unlikely to receive a penny. According to a report by administrators Moore Stephens, the developer had withdrawn £28.7m of buyers’ money without determining how this had been spent.
Around £13m was spent in commissions to the developer’s sales agent, another Pinnacle company named Pinnacle MC Global Network; this left the developer £10m short of the initially-agreed design-and-build costs before any construction work had begun.
Following this, construction costs on the project nearly doubled from £22.1m to £43m in a period of nine months.
Convicted conman Tony Freeman has been linked to the Angelgate development, and while Pinnacle confirmed that Freeman was a “consultant that strategically advises the Pinnacle Alliance board of directors”, he “does not own Pinnacle and is not a director of Pinnacle”.
The developer was liquidated last year, and investigations into the ultimate beneficial owner of Pinnacle and its parent company MVG Holdings. The site of the development was bought by Far East Consortium at auction last year for £5.2m; FEC’s development is not impacted by the SFO investigation.
At the New Chinatown site, pictured above, the developer China Town Development Company is under investigation. The company was purchased by Great George Street Developments by share purchase in March last year, with the aim of restarting work on the site.
At the time of the purchase, Great George Street said “none of North Point Global’s directors or shareholders will have any further involvement in the site”, where Liverpool City Council has the freehold.
Neal Hunter, development director at Great George Street Developments said: “There is categorically no connection between this investigation and our company, which is now in the process of rescuing a disastrous project and ensuring investors who were left out of pocket by the company under investigation get the chance of some of their money back.”
A planning application has since been submitted for a refreshed scheme at the site. The first phase includes 117 apartments and 4,100 sq ft of commercial space, and two further phases will include 466 apartments, 37 townhouses, 60,500 sq ft of shops, restaurants, and bars. There will also be 45,000 sq ft of offices and a 144-bed hotel
North Point was also bringing forward a development at Pall Mall, a site which stalled in 2016, pictured below. It has since been purchased by Elliot Group, which is set to bring forward a refreshed scheme; it is understood this will not be impacted by the SFO investigation, with the developer already moving forward with its new plans for the site.
Demolition work is now under way, with Elliot working alongside architect Falconer Chester Hall. The original scheme had planning permission for 366 homes but Elliot Group said it would be looking to develop a mixed-use scheme with both employment and residential uses.
Elliot Lawless of Elliot Group said: “This is on the northern boundary of the business district and would make a natural extension for it so we’re examining the feasibility of office uses alongside hotel, leisure and residential provision and will seek the council’s views shortly.
“Whatever we collectively agree, it will be better than what came before and will create more jobs and infrastructure for the city,” he added.
The SFO is encouraging members of the public who have invested in any Pinnacle’s Angelgate, New Chinatown, and North Point’s Pall Mall project to complete a questionnaire that can be found here.
Pinnacle companies have also seen a number of other developments stall in Liverpool: The Quadrant, and Victoria House. Both of these have since been bought after their special purpose companies entered administration, and neither of these is subject to an investigation by the SFO.