HOLIDAY COMPANY WOUND UP AFTER DTI INVESTIGATION
A company which misled people into buying its shares in order to obtain exclusive holidays has been wound up following a DTI investigation.
Essex-based company Somerville Leisure plc was wound up by the High Court on 19 September 2001, in the public interest.
The company sold its own 'non-voting' shares to investors who were then entitled to join a holiday club called the Dream Leisure Club.
A petition to wind up the company showed that members of the public had been misled into believing that they could sell their shares on the open market, when in fact there was no effective market for these shares. There was inadequate separation of the affairs of the company and the club.
Those involved with the company were taking excessive commissions for sales of shares and there were no adequate accounting records for either the company, Somerville Leisure plc, or the holiday club, Dream Leisure Club. The investigation also discovered that the company was insolvent.
Investigators also reported that the directors had been unwilling to co-operate with the enquiry.
The petition was presented following an investigation carried out by the Department's Companies Investigation Branch (CIB) under section 447 of the Companies Act 1985 which enables investigators to require a company to produce its records. If it is in the public interest the Secretary of State may use the information obtained to petition the Court to wind up a company or to disqualify the company's directors.
The petition was presented on 1 August 2001 and the Official Receiver was appointed provisional liquidator of the company on 6 September 2001. The Official Receiver's role was to protect and preserve the assets and financial records of the company until the hearing of the winding-up petition.
By virtue of the winding up order on 19 September, the Official Receiver is now the liquidator of the company and has a responsibility to investigate why the company failed and the conduct of the directors in relation to its affairs.
The company was incorporated on 9 July 1998. Its registered office and trading address is Stapleford Aviation Centre, Stapleford Aerodrome, Stapleford Tawney, Essex, RM4 1SJ. Its former registered office and trading address was at Somerville House, 20/22 Harborne Road, Edgbaston, Birmingham, B15 2AA.
The directors of the company are Mr Paul Edward Harris, Mr Jonathan Christian O'Brien (both appointed on 9 July 1998) and Mr John Patterson (who was appointed on 3 December 1999). The secretary of the company is Mr Paul Edward Harris.
On 1 December 1999 a Gibraltar based company of which Mr Patterson was the sole director at the time, acquired all 500,000 10p voting shares issued by the company. The shares were purchased from Mr Andrew John Harris (no relation to Mr P Harris), who was a director of the company from 27 November 1998 to 1 September 2000. Mr A J Harris trading as A J Harris Associates entered into the only agreement with the company to supply holiday accommodation.
The petition was initially opposed by the company, as was the application for the appointment of the Official Receiver as provisional liquidator. In opposing the matter the company gave various undertakings to the Court to cease offering any new shares or club memberships and not to dispose of any of its assets until the Court reached a decision.
In the event, the company did not serve any evidence opposing the petition but in the meantime, during the currency of the adjournment, on 21 August 2001, without reference to the Court or to the Secretary of State, resolved to be wound up voluntarily and appointed Mr Hasam Iman Mirza and Mr Clive Robert Hammond, Insolvency Practitioners, as joint voluntary liquidators.
The adjourned hearing of the Secretary of State's application to appoint the Official Receiver provisional liquidator came on before Mr Justice Rimer on 6 September 2001. Rimer J ordered the appointment of the Official Receiver as provisional liquidator notwithstanding the intervening appointment of voluntary liquidators. In making the order Rimer J stated that the directors had:
"... displayed, it would seem, a somewhat secretive enthusiasm to appoint voluntary liquidators and with it, at least initially, an enthusiasm to maintain themselves in the saddle as managers".
On 19 September 2001 the petition to wind up the company was heard by Mr Registrar Jaques. The matter was unopposed and a winding up order was made.
All public enquiries concerning the company should be made to:
THE OFFICIAL RECEIVER
Public Interest Unit
21 Bloomsbury Street
London WC1B 3SS
Tel No: 020 7637 1110