Six directors, including one based in Wirral, have been banned for a total of 54 years after more than 300 investors lost a combined £12m on residential property, including a scheme in Manchester.
The investigation conducted by the Insolvency Service centred on property developer Absolute Living Developments, which sold apartments in the North of England off-plan to largely Asian-based investors, focusing on the conversion of commercial buildings. It is understood that these included a building in Chester Road billed as the Printhouse, a further Manchester holding, and the long-derelict East Lane House in Runcorn.
Registered in Liverpool in 2013, Absolute was sold to London-based Daniel Mark Harrison in December 2015, the buyer describing himself as a “white knight” – Harrison’s DMH business had bought the Runcorn building a month previously, announcing plans for a development called the White House, including 448 apartments. The scheme was later rebranded as Harrison House, and has subsequently been bought at auction by Shah Capital.
Harrison has now been banned from acting as a director for six years through a court order, while Wirral-based Adrienne Mae Kwan Nyau, who was listed as a director of Absolute between August 2014 and June 2015, has been disqualified for six years as a result of an undertaking. The remaining four directors are Malysian-based. Absolute is now in liquidation.
The investigation was triggered by Bradford Council over non-rate payment and centred around four developments – three in the Yorkshire city and the Chester Road building – after investors complained that having invested through Absolute Living Developments, projects had not been fully completed and apartments were unliveable.
Investigators discovered various examples of misconduct by Absolute Living Developments facilitated by the directors, with the company providing misleading and incomplete information about the developments to investors, meaning people couldn’t carry out due diligence.
Absolute Living Developments had no ability to ensure the terms of contracts with investors could be met and failed to provide adequate safeguards for money obtained from investors. For one development, the company requested completion payments despite the development not being completed. The Insolvency Service added that the company signed charges over Absolute Living Developments’ assets, which meant that a third party owns them and there are no remaining assets in the liquidation to pay creditors.
An independent insolvency practitioner has been appointed in this case to investigate recovery of assets for the benefit of creditors. The liquidator’s actions are ongoing and to date they have received claims from creditors in excess of £68m.
Ken Beasley, official receiver for the Insolvency Service, said: “This was a complex investigation, considering the amount of money that was invested, not all of the directors were based in the UK and we worked with several other authorities.
“We want to draw attention to these rogue directors so we can alert people about the risks involved when investing, while also warning that we will investigate and tackle those that set out to deliberately rip people off by misrepresenting the investment opportunity on offer.”