Minerva Corporate Development Limited (Minerva) sold shares in two main client companies, Magna Group plc (Magna) and Metal Innovations Holdings plc (Metal Innovations). This raised over £7.5 million in sale proceeds, of which Minerva retained £3.8 million or just over 50%, by way of commissions and dubious ‘Investor Relations’ services.
Minerva failed to keep adequate records to even show how many shareholders had been lured into share purchases, mainly on the back of unsubstantiated and over-inflated claims it had made about the two client companies. One of these Magna, was wound up in the High Court in July 2009 following a separate CIB investigation.
Minerva was in breach of a number of Financial Services and Markets Act 2000 (FSMA) share selling regulations. Not only was the company not authorised by the Financial Services Agency (FSA) to conduct a share selling business, it targeted prospective clients through illegal cold calling approaches to unsuspecting members of the public.
In the case of Magna , Minerva made serious misrepresentations as to the value of the business of Magna and its future growth prospects, leading many investors to make multiple share purchases.
The CIB investigation also found that Minerva:
- had failed to pay very substantial sums in tax (VAT, PAYE and NI)
- had paid unexplained kickbacks
- had allowed its assets to be used for the personal benefit of a director
- was insolvent.
