Cpcmcredit Blog

You learn something every day…

“The process by which a company is wound up in the public interest rather than because it is insolvent.

A petition for a company to be wound up in the public interest may be presented by the Secretary of State if he considers that it would be expedient in the public interest for the company to be wound up. The applicable test for the court is whether it would be just and equitable to wind up the company. Such an order results in a compulsory winding up and is usually made on the basis that the company is being run in an unsuitable or objectionable manner.”

Im sure that many readers were aware of this and perhaps its logical where the enterprise is clearly a criminal enterprise but the this has been enacted in areas where there the business’s trading has clearly been surrounded by a whiff of fraud

This is a particular example in the ever murky world of diamond trading.

“iGL, a company based near Hatton Garden in London, provided certificates to Diffraction, a company based at Jumeirah Lake Towers in Dubai, United Arab Emirates, that was at the centre of a scheme to sell fancy coloured diamonds to investors, via numerous broker companies based in the United Kingdom

Diffraction provided an online trading platform to numerous UK-based broker companies who sold the diamonds to members of the public at mark ups so high that investors were unlikely to obtain any return on their investment . The company also offered and controlled the storage of investor’s diamonds in a storage fault in Dubai”.

It could be argued that this was a case of caveat emptor and “investors” daft enough to dabble in this particular market expecting instant high returns deserve what they get (readers of this blog will of course be aware of a previous recent example) but HMG has taken a differing view and in truth, there can be few complaints