Insolvency Service calls for help after fake IP shut down
29 July 2024
The Insolvency Service has asked the profession to help after the winding-up this month of a Manchester-based company that was acting as an unlicensed insolvency practitioner.
According to the Insolvency Service, Save Consultants Ltd had advertised that it offered an ‘alternative solution’ to formal insolvency proceedings and claimed its directors had worked in insolvency and corporate restructuring for years despite none of the current or former directors being licensed IPs.
Save Consultants claimed on its website that it could legally sell companies within 48 hours for a one-off payment, but did not explain what would happen to a company’s liabilities nor how directors would be held to account.
The Insolvency Service said that Save Consultants provided a brokerage service to help directors of companies in financial distress sell their interest in the business and leave debts behind. But the directors of the business failed to respond to requests after the Insolvency Service launched an investigation, which meant that the Service could not accurately establish who had been in control of the company’s affairs. The business was shut down by the Service on 2 July and the Official Receiver appointed as liquidator.
David Usher, chief investigator for the Insolvency Service, said: “In a recent case at the High Court, my team secured a winding-up order against a company that was offering unlicensed insolvency practitioner services. These actions clearly put the integrity of the insolvency regime at risk.
“Stopping businesses such as this from trading is a key part of our enforcement activities. We have dedicated teams whose sole focus is to investigate complaints about corporate abuse by live companies. This may include serious misconduct, fraud, scams or dishonest practice in the way the company operates.”
Usher called on the profession to take action to protect the insolvency regime via the ‘complain about a limited company’ page on the gov.uk website.
He added: “It is really important that licensed and reputable insolvency practitioners and directors play their part in creating that level playing field we all want. If you come across other companies making similar claims which risk undermining the insolvency system, we want to hear from you.”
Recovery News could not reach the directors of Save Consultants for comment.
The claims by Save Consultants that they could help directors walk away from businesses debt-free echo those made by Rigil Kent Acquisitions Limited, another company that offered ‘unlicensed insolvency practitioner’ services and was shut down by the Insolvency Service in 2018. In 2022, Rigil Kent de facto director Kevin Morris was disqualified from acting as a company director for 15 years, with the High Court judge recommending that the case be brought to the director of public prosecutions for criminal charges.
