Wales-based Halifax Mannin and Hey Design Services of Birmingham were shut down following a High Court ruling in Manchester.
The Official Reviewer was also appointed as the liquidator for both companies.
Investigators from the UK’s Insolvency Service found that, between October 2017 and October 2018, Hey Design Services received over £1.1m ($1.4m, €1.3m) in funds and Halifax Mannin received around £250,000. The roughly £1.4m was paid into the firms’ bank accounts.
But, as the directors of Hey and Halifax Mannin failed to cooperate with the authorities, it is not known how the funds were spent.
The money was supposed to be invested in works of art by renowned painters.
International Adviser recently reported that art investment has been on the rise over the past decade, with growing numbers of investors buying masterpieces. Something they clearly need to do with caution.
Operations leading to Spain
The investigation uncovered that the art investment scheme was operated by a separate business, Asset Consulting Services, which is based in Spain and was also subject to previous warnings by the UK’s Financial Conduct Authority.
The companies were wound up on the basis that they traded without commercial probity, incorporated and/or used vehicles for fraudulent purposes; and solely with the intention of receiving money from investors who were mislead or bullied into making such investments.
Additionally, the High Court said, that both companies operated with a lack of transparency and the directors failed to cooperate.
“Despite accepting more than £1m from members of the public, including elderly and vulnerable people, there is no evidence to indicate that the investment had any value or was likely to generate any return for the investors,” David Hope, chief investigator for the Insolvency Service, said.