Saturday, 30. December 2006
The company [Land Heritage (UK)] took £5m from 700 investors in return for small parcels of farmland in Sussex and Lincolnshire. Liquidators Smith & Williamson have told them there is nothing left for creditors. LHUK was one of many "landbankers" who buy farm land at agricultural prices - £5,000 to £10,000 an acre - and split it into small slices, selling each 0.1 acre plot for £10,000 or more. The deal means landbank promoters can make upwards of £100,000 profit per acre without even a whisper of planning consent.
LHUK collapsed after the Financial Services Authority said it was a "collective investment" as the company - and not individual investors - would control planning applications and land sales. Collective investments must be FSA-regulated and LHUK was not authorised. The FSA told it unofficially it could avoid prosecution if it repaid investors. But the cupboard is bare.
(Via Guardian Unlimited. To read the full story, click here)