On 12 June 2013, Foreco Growth Investments Ltd, a UK-based company that sold carbon credits as investments, was wound up in the High Court in London. The company is the latest in a series of similar companies to be investigated by the Insolvency Service and subsequently closed down.
In an 18-month period, the company managed to raise more than £1.7 million from the public – largely by selling them voluntary carbon credits. The company was registered in August 2009, but the carbon credit sales started in October 2011, when two new directors, Matthew Tresham and Joseph Harrison, took over the company. Before that, ForEco Growth sold investments in Robinia tree plantations in Germany.
On its website Foreco Growth claimed to be a “a leading consultancy specialising in supporting ethical and socially responsible projects”. In October 2012, Andrew Penman at the Daily Mirror reported that a reader had bought carbon credits from ForEco Growth, but could no longer contact the company. Penman found that the company was run from a virtual office, which by then had been abandoned.
“More proof that you should keep your savings well away from carbon credits,” Penman commented.
The investigation by the Insolvency Service found that ForEco Growth:
- misled the public by claiming to be “a leading consultancy specialising in supporting ethical and socially responsible projects” while clearly not;
- used high-pressure sales techniques to target potential investors;
- applied excessive mark-ups on the carbon credits resulting in a higher than necessary price for the ‘investments’;
- Failed to help customers make onward sales of the carbon credits as there was little or no prospect of resale; and
- Claimed to comply with Financial Services Authority (now the Financial Conduct Authority) regulations while not doing so.
David Hill, an Investigation Supervisor at the Insolvency Service said:
“These companies could not support their exaggerated claims and many who fell for their slick patter ended up losing out.
The Insolvency Service will take action against and put out of business, companies that set out to rip off honest investors.”
ForEco Growth was listed as one the companies for which Carbon Neutral Investments provided “clearing and settlement services”. In March 2013, the Financial Services Authority put out a warning about Carbon Neutral Investments:
Several unauthorised firms promoting and selling carbon credits are telling investors that Carbon Neutral Investments Limited (CNI), a firm authorised by us, will handle the money in their investment.
We believe this is done to suggest investors will be protected as though they are dealing with an authorised firm. But this is not correct.
Carbon Neutral Investments is now called Opus Capital and Gemmax Solutions has taken over CNI’s “clearing and settlement” services. (ForEco Growth is no longer listed on Gemmax Solutions’ website.)
In June 2012, the directors of Foreco Growth registered another company, Global Alternative Investments Ltd.