The High Court in Manchester wound up Clark Sinclair Limited on 29 October, after the Insolvency Service found it took £123,052 from directors by offering £1 sales of indebted companies.
The Insolvency Service said on Wednesday that its investigation found the company was providing misleading services to directors of businesses in financial difficulty.
David Usher, chief investigator at the Insolvency Service, said: “Clark Sinclair Limited took advantage of struggling businesses by offering directors a misleading route out of their company’s debts, charging thousands of pounds for the service.”
The company was wound up in the public interest under section 124A of the Insolvency Act 1986, a power under which a court can close a company on public interest grounds.
Promotional emails from Clark Sinclair suggested directors could avoid reputational damage by selling their companies before liquidation (a formal process in which a company is closed and its assets are dealt with for creditors).
The company told clients it could find buyers for companies with debts and that sales could be completed within days.
The shares would be sold for £1, while Clark Sinclair charged brokering fees of between £2,500 and £6,800, so the fee ran from 2,500 to 6,800 times the price of the shares.
Investigators identified the £123,052 in customer payments across two company accounts. They also identified 51 companies which appeared to have changed ownership following payments to Clark Sinclair.
The company also misrepresented the role of insolvency practitioners, the professionals who run insolvencies, by incorrectly suggesting they sold company assets solely to pay their own fees.
Clients were not warned that the actions Clark Sinclair advised them to take could breach their duties as directors.
Its registered sole director told investigators they had never heard of the company, which raised concerns that they were appointed without their knowledge or consent. Investigators were unable to identify who was behind the company.
The Insolvency Service said selling a company does not prevent the conduct of its former directors from being investigated if it later enters liquidation. Usher said Clark Sinclair “not only deceived their customers but undermined the insolvency sector.”
Clark Sinclair Limited, company number 15324100, was incorporated on 3 December 2023 and is registered at Initial Business Centre, Wilson Business Park, Manchester.
The winding-up came less than three years after the company was incorporated, and the order closed it in the public interest.
All enquiries about the affairs of the company should go to the Official Receiver’s public interest unit.
