Four glass recycling companies have been wound-up in the High Court following an investigation by the Department for Business, Innovation and Skills Insolvency Service.
The four firms were headed up by the Magna Group and consisted of Magna Engineering, Magna Recycling and Magna Toughened Glass. The group had set up a glass recycling plant near Selby in North Yorkshire but failed to generate anything other than peripheral orders, mainly for
recycled glass as a by-product.
An Insolvency Service spokesman said: The company were wound up [closed down] for allegedly misleading people.
The Insolvency Service stated that the sales of the recycled glass totalled less than £40,000 over three years. Prospective shareholders had been told that the group would be generating turnover in the tens of millions of pounds within two years of starting operations. Other claims made to shareholders concerned the existence of imminent orders that never materialised, expansion plans that did not come to fruition and the value of the business, which included one valuation of £150 million that proved to be totally unfounded. The court heard how the group was heavily insolvent, with estimated creditors in excess of £1.1 million as at the date of winding up.
Magna failed to comply with Financial Services Authority regulations governing the sale of investments. Due to the failure of the firm to keep proper records, it was unable to provide an accurate account of how many shareholders it has. The Companies Investigation Branch of the Insolvency Service estimated that it had received up to £2.3 million from purchasers of preference shares, of which more than 40 per cent of that sum was paid to a third party share selling agent employed by the firm.