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Financial Conduct Authority wins appeal case against Capital Alternatives

The Court of Appeal has upheld a February 2014 High Court ruling in which the Financial Conduct Authority won their case against Capital Alternatives and other firms. The FCA accused the firms of “promoting and/or operating collective investment schemes (CISs) in the UK illegally and without our authorisation”.

Some of the defendants appealed the High Court decision of February 2014. The appeal was heard on 27 and 28 January 2015. The Appeal Court ruled in the FCA’s favour.

Under the Financial Services and Markets Act 2000 it is illegal for unauthorised persons to carry out collective investment schemes. The Appeal Court Judgment states:

“It is a criminal offence for an unauthorised person to carry on a regulated activity in the UK (section 23) and, subject to exceptions, it is an offence for such a person in the course of a business to communicate an invitation or inducement to engage in investment activity, which includes establishing or operating a CIS (sections 21 and 25 and Schedule 2). By section 26 an agreement by an unauthorised person in the course of carrying on a regulated activity is unenforceable and entitles the other party to recover money or property transferred or compensation for loss. But under section 28 the court has power to allow the agreement to be enforced if satisfied that it is just and equitable in the circumstances of the case. Section 382 (d) of FSMA enables the court to require persons who have contravened the Act, or been knowingly concerned in a contravention, to make appropriate restitution to investors who have suffered loss. Those who have operated and/or promoted the schemes may also be liable to prosecution under s 397 of FSMA in respect of what the FCA claims were misleading statements which led investors to invest.”

The two court decisions are available by clicking on the links:

The FCA case against Capital Alternatives focussed on two of the “investments” under Renwick Haddow’s Capital Organization network of companies:

  • African Land (also known as Agri Capital) which offered investments in rice farm harvests in Sierra Leone – run by African Land Limited.
  • Reforestation Projects (also known as Capital Carbon Credits) which offered investments in carbon credits intended to be generated from land in Sierra Leone, Brazil and Australia – run by Reforestation Projects Limited.

The full list of the defendants is here.

More than 2,000 people handed over a total of almost £17 million to Capital Alternatives and related companies under these two schemes.

In its press release about the Appeal Court ruling, the FCA notes that,

If this decision is not appealed further then the FCA can proceed with any remaining aspects of the case which still need to be ruled on by the Court.

And it explains that the Court “may order the defendants to pay us compensation that will then be paid to investors in the schemes”. The FCA provides no further information and states that, “We will update this page when we know more”.

The FCA advises that investors in these schemes do not need to take any action “in relation to the FCA’s case at this stage”, and adds, “We will give you further information when it is available”.

The FCA posts this warning:

We are aware that some investors may have been approached by third parties offering to assist them in disposing of their investments with African Land or Capital Carbon Credits, in some instances these individuals claim to work for, or on behalf of, the FCA. You should be extremely cautious if you are approached, particularly if you are asked to make a payment in advance.

FCA advises contacting its Consumer Helpline (0800 111 6768) if you are “approached by an unauthorised firm or individual”.

A company called Regulatory Legal Solicitors is pursuing compensation claims for some investors in these schemes. Tobias Haynes of Regulatory Legal Solicitors told the website Professional Adviser,

“The judgment is welcome news for investors and the regulator no doubt. It provides clarity with regard to what constitutes a UCIS [unregulated collective investment scheme], bringing many schemes into regulation and potentially offering redress that would otherwise be unavailable.
“The decision also brings new hope for direct and SIPP investors who did not have the benefit of advice.”


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  1. I am amazed Mr Haddow scams people for £18 million plus any no one steps up to the plate to stop him!


  3. It seems African Land have appealed to the Supreme Court
    They reckon they will know by the end of August if the latest appeal will be allowed to go ahead.