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Review of
UK LAND INVESTMENTS GROUP

Page Three of Three

8. Where are they now?
Paul Charney LLB (Hons), Landhold Capital

Brian Smith BA (Hons) MRTPI, Strategic Land Director, SJ Capital Group
Derek Lawrence BTP MRTPI MRICS
Bally Chohan
Nigel Walter
Robin Barton, Solicitor

 

1. Review
Review from Business Opportunity Watch Rating Reviews, October 2007 Issue 8

2. Editorial Postscript of 13th September 20083. Events after October 2007


Go Back to Page Two

4. BOW Letter to Jonathan Phelan of the FSA

5. Can plot owners get a refund from their banks?

6. FSA Reply dated 5 November 2008

7. BOW Reply dated 31st December 2008




8. Where are they now?
26th January 2012
Paul Charney LLB (Hons), Landhold Capital

Brian Smith BA (Hons) MRTPI, Strategic Land Director, SJ Capital Group
Derek Lawrence BTP MRTPI MRICS
Bally Chohan
Nigel Walter
Robin Barton, Solicitor

As already reported, the auditors of UK Land Investments Ltd, Moore Stephens, sounded a large warning bell on 11 January 2007 when they resigned and filed notice under s392 of the Companies Act. 

Unfortunately, it took the authorities a further 15 months to take action, during which time the company sucked in millions more from investors.

On 1st April 2008 the Financial Services Authority petitioned the High Court to wind up UKLI on two grounds - that "the Company was unable to pay its debts and that it was 'just and equitable' that it should be wound up as a matter of public interest".

As the Financial Services Authority said in their press release of 4th June 2008:

"UKLI advertised and sold plots of land to people by claiming that it could get planning permission for the land, which would increase in value and make investors a large profit once it was sold to a developer. As a result, about 4,500 investors paid UKLI £69 million to buy the land. None of the land sold was ever granted planning permission."

The auditor's notice said, "We are writing pursuant to section 394 companies Act 1985 to inform you of circumstances connected with our ceasing to hold office which we consider should be brought to the attention of the member and the creditors of the company". 

The letter goes on to record the following: "The duly appointed directors of the company appear to have no involvement in the running of the business.  Instead, the business is run by Robin Barton, Nigel Walter and Paul Charney, none of whom has been formally appointed as a director.  Neither the sole shareholder nor the de jure or de facto directors have been prepared to address corporate governance issues with us."

It has recently come to my attention that some of the people involved with running UKLI are still active in the same activity of acquiring a large plot of land without planning permission and dividing it up into small plots to market to members of the public, as follows:

Paul Charney LLB (Hons)
Landhold Capital

Named in January 2007 by the previous auditors, Moore Stephens, as one of the three people running UKLI, Paul Charney is now the managing director at a company called Landhold Capital at www.landholdcapital.com.

Landhold Capital says that it is "an independent strategic land and planning promotion company".

I had a number of questions about Landhold Capital which I sent to Paul Charney as follows:

  1. Having reviewed UKLI Land Investments Group in October 2007, rating it at zero out of ten, and then followed the story of its sad demise, I was interested to recently learn that you are still apparently involved with land banking and selling plots to individual investors through your company Landhold Capital.

    The website of Landhold Capital says that "We are recognised for our expertise in assembling prime sites throughout the UK and then steering them through the planning system for ultimate sale to developers".

    Please let me have details of the sites on which you have obtained planning permission and sold them to developers.

  2. I noticed that, oddly, the website of Landhold Capital not only lacks any Terms and Conditions page, but it doesn't even give the name of the person running the site.

    This is odd, and it seems to me to be even more odd for the website of a company run by a lawyer.

    Even the Contact Us page doesn't give any name to write to, just an address. It doesn't look very professional to me.

    Why is this?

  3. Since the website of Landhold Capital says that you are the managing director, and according to Companies House the only directorship you still hold is at a company called Landhold Capital Ltd, I assume that Landhold Capital business is run by Landhold Capital Ltd. Is this correct?

  4. For a company which claims that "We are recognised for our expertise in assembling prime sites throughout the UK and then steering them through the planning system for ultimate sale to developers" and "Over the years we have established long-standing and mutually beneficial relationships with all our trusted agents", I was surprised to discover that, according to Companies House, Landhold Capital was dormant until three years ago.

    Not only that , but its latest accounts (for the year ended 31st January 2011) look rather thin, and not like the accounts of a landbanking company at all. The company has shareholders' funds of only £287 and share capital of £100. There are only £11,677 fixed assets shown in the accounts, and these seem to consist of computer equipment and fixtures and fittings. The only other assets are debtors of £44,900 and cash of £2,775: there is no figure in the accounts which could relate to the company's holding of land. How can this be when the company states its purpose as "Identifying, acquiring and promoting strategic land ... Our focus is exclusively on identifying, acquiring and promoting sites with strong strategic development potential.... We are recognised for our expertise in assembling prime sites throughout the UK and then steering them through the planning system for ultimate sale to developers. Our flexible funding structures allow us to purchase a diverse range of land interests that have medium term potential for development."

    Please explain what has happened to the land which, according to the website, Landhold Capital has bought and is selling at:

    - Hedge End, Hampshire
    - Hullbridge, Essex
    - Redditch, West Midlands
    - Houghton Regis, Bedfordshire
    - Dartford, Kent

    For example, for the site at Redditch, West Midlands, your sales material says "Landhold Capital has carefully identified and secured its largest landholding here". Where is it in the accounts, or am I missing something?

  5. I note that there seems to be an omission on your profile at Linkedin, because you've forgotten to mention your involvement with UKLI. Also, your LinkedIn profile says that you were the managing director of Landhold Capital from January 2007 to the present, but Landhold Capital was dormant until January 2008 and its website was only set up in March 2009. Strangely, also, its website is held under a special secrecy arrangement. Why don't you want people to know who owns the company's website?

  6. In May 2010 the website of Landhold Capital showed that it was designed by a South African company. This interested me, because Landhold Capital seems to work together with a South African company called SJ Capital Group.

    SJ Capital Group has two websites - one at www.sjl.co.za, and another identical site at www.sjcapitalgroup.com.

    sjl.co.za started life in 2005 as a website belonging to St. James's Land, and in 2010 it changed its name SJ Capital Group.

    St. James Land Ltd was in the same business of buying up areas of land without planning permission and dividing them into plots to sell to members of the public. The company is wholly owned by Bally Chohan, who was a founding director of UKLI, and who was a director of UKLI from the day it was set up in February 2003 until just after the winding up petition was served in May 2008.

    On 18th March 2008 Baljinder Chohan was disqualified as a director for four years following an investigation by Companies Investigation Branch of the Insolvency Service regarding his company UK Property Fund Managers Ltd, a company set up to raise up to £1 billion equity for a property fund.

    As stated earlier in this report, the Court found that the proposal document for UK Property Fund Managers Ltd contained a number of lies and misleading statements, such as figures for the value of projects which had been falsely-inflated on Mr. Chohan's instructions; a false claim that there was an impending partnership between UKPFM and an NHS Trust; false names included in the list of executive team members; and lies in Mr. Chohan's own CV about holding an MBA from Henley Management College and having been a Communications Director at British Airways.

    There's also a mysterious pattern of musical chairs (or "pass the donkey" perhaps?) with the directorships of St. James's Land Limited, again wholly owned by Bally Chohan. In less than 5 years, there was a succession of 10 directors who resigned. One of them was Bally Chohan himself, who was appointed on 3rd December 2003 and resigned on 19th November 2004. Another director, Sameera Shaikh, has come and gone twice. A further director, Lukhbir Bains, was appointed on 15th January 2007 and resigned on 27th February 2008, only to be re-appointed on 30th May 2008 as the sole current director.

    St. James Land Ltd was not subject to the FSA winding-up petition and is not in Administration. However, there is currently a proposal to strike it off, so it seems that it will soon be no more.

    Previously, the St. James Land websites proudly claimed that the company was "founded in response to a number of unscrupulous companies who were buying and promoting worthless tracts of agricultural land with no real development potential, that broke all the planning rules". Well, fancy that!

    The St. James Land business now seems to be mainly carried out through the websites of SJ Capital Group at www.sjcapitalgroup.com and www.sjl.c.za.

    Oddly, just like Landlord Capital, these websites do not give the name of the company or the person running the SJ Capital business.

    In November 2011 SJ Capital Group were exhibiting at the Fields Shopping Centre in Kloof, Durban and at Irene Village Mall in Irene, Pretoria. SJ Capital Group appear to be carrying on the same business of selling plots of UK agricultural land to the residents of South Africa, who hope that it will obtain planning permission.

    Is this right?

    The reasons why I assume you would know is because Brian Smith BA (Hons) MRTPI is shown as the Strategic Land Director for both companies, and SJ Capital Group are selling plots at the same site in Houghton Regis as your company. The Landhold Capital website says that Landhold Capital owns this site: "Located five miles west of Luton and close to the town of Houghton Regis, Landhold Capital secured the freehold of a four acre greenfield and partly brownfield site".

    Oddly, SJ Capital Group imply that they own it, too. They say "Our latest strategic land investment site is in Houghton Regis, Bedfordshire. ... The council have recently employed an officer specifically to deliver this scheme. Our initial discussions with the officer have been positive and focused on the timing and process to deliver development of the site".

    So, who owns it - Landhold Capital Ltd? SJL Capital Group? Or somebody else?

    And whose responsibility is it to obtain planning permission?

  7. What I found really surprising is that your company seems to be involved in an illegal unauthorised collective investment scheme. That's the same as UKLI: the Financial Services Authority asked the High Court to wind up UKLI because they claimed that it was operating an illegal collective investment scheme.

    Whereas your sites at Hullbridge in Essex, Redditch in the West Midlands and Hedge End in Hampshire are promoted to be sold intact to developers, the site at Houghton Regis in Bedfordshire seems to follow the model which got UKLI into trouble.

    For the site at Houghton Regis in Bedfordshire your company's website says that: "The site will either be developed in conjunction with the major consortium or it has potential to come forward independently as an early release mixed use scheme."

    SJ Capital, which is also marketing the same Houghton Regis site, says on its web site that the land is being sold as individual plots of 250 square metres at £55,000 each and that "On the successful allocation of the site to residential use within the greater development area, it is projected that plot owners will enjoy approximately £55,000 cash returns within a 18-24 month period". SJ Capital also says that "Our initial discussions with the [council] officer have been positive and focused on the timing and process to deliver development of the site." Presumably, since the Landhold Capital website says that Landhold Capital owns the freehold of this site, SHJ Capital Group were acting on your instructions in talking to the council officer.

    Is this a mistake, or am I missing something?

  8. Is Bally Chohan still involved with SJ Capital Group?

Reply from Paul Charney:

Thanks for your letter, it seems you have totally misunderstood our strategic land business model.

Landhold promote sites privately, and does not sell land to individuals. Landhold purchases land and options for 3rd parties. Its clients are corporations and not individuals.

Landhold does not land bank, it actively promotes sites through the planning system. Landhold acts for a number of private companies in this regard.

The sites mentioned on our website were purchased under options and freehold, the options are held, promoted and only sold upon planning gain. This is the housebuilders strategic land model. Please refer to the definition of an Option on our website - you will also note next to each site that it refers to “options” acquired. (options are not freehold land)

Landhold requires no terms and conditions at it does not sell land (please revert back to the website). The website is purely for information purposes.

Landhold is a private company, it was established on 01/11/2007.

The sites you refer to, are private sites but you are welcome to see how strong the sites are with regards to planning assessment, by contacting each of the local authorities planning officers. If you phone them (and I strongly request that you do!) then you will see that the sites are already or are soon to be allocated, placed in the core strategy or in the urban zone. Please do not take my word for it, but ask an independent planning professional, or planning officer in each area. The core planning documents are public information - all you have to do is read them.

I was never employed by UKLI, I acted as legal consultant for a number of companies (inc UKLI) this was confirmed by the DTI and FSA when they did their investigation. As you will know UKLI made a number of spurious claims, which have been proven to be unreliable.

Please refer any questions about other companies to its directors, I’m sure your research does not include speculation or hearsay, but facts directly from its source.

Mr Brian Smith is employed by Landhold Capital, we provide planning services to number of private companies.

Houghton Regis is a site mentioned in the Central Beds core strategy and the planning is promoted by Landhold - it is not owned by Landhold.

What we promote is the housebuilders model to strategic land - and is not even similar to that of UKLI. Options are bought and held. Freehold sites are bought on behalf of 3rd parties, we will advise on planning. I’m not sure that you could run the argument about Wimpey strategic land company as that of UKLIs. Please do not rely on UKLIs definition of strategic land as being the correct one. Strategic land is not required to be regulated by the FSA.

If you would like to discuss this further, then I am available to chat.

I appreciate the questions, but I suggest that you first understand what is strategic land (do not rely on UKLI for that definition), then please reread our website, and then talk with planning officers in each local authority (or recognised planning professionals who understand strategic land) for confirmation that all of our sites are high quality strategic land sites.

Kind regards

Paul Charney

Brian Smith BA (Hons) MRTPI
Strategic Land Director

I sent Brian Smith the following questions:

  1. I understand that you are the Strategic Land Director at both SJ Capital Group, which appears to be a South African company, and also at the UK company Landhold Capital Ltd.

    I've only just become aware of Landhold Capital, and I wasn't aware that you were still involved in the business of acquiring land without planning permission, dividing it up into plots and selling it to members of the public who hope to profit from obtaining planning permission.

    You also held the same role of Strategic Land Director at UKLI Ltd (UK Land Investments Group) for several years. I couldn't see any mention of this on your LinkedIn profile, but it did contain the following entry:

    MD
    BSc Planning
    2005 – 2008 (3 years)

    Is this a reference to the years you spent at UKLI?

  2. I actually regard your role at UKLI as pivotal, because without the details of your long years of experience and your reassuring professional qualifications, I don't think that nearly so many people would have bought plots from the company.

    Please comment.

  3. Since you left George Wimpey in 2005, has any of the land which you have had a hand in buying and dividing up into plots to sell to the general public ever obtained planning permission?

    And has any of it ever been sold to a developer, so that the investors made the profit which led them to buy the plots in the first place?

    The reason why I ask is because your profile at www.landholdcapital.com says:

    "Over his career Brian has taken many sites from identification, through acquisition and promotion to development or sale. Examples of greenfield sites successfully promoted include 3,300 units in Cambourne new village Cambridgeshire, 10,000 units across three phases in Haydon Sector North Swindon and 800 units in Romsey, Hampshire."

    I recall that one site where plots were sold by UKLI was not only in the greenbelt but was also liable to flooding according to a December 2006 article headed "Indians plough cash into false hopes of new homes on English green belt" in the Guardian. That site was presumably some mistake, but I didn't think that ANY land which had been divided up into plots and sold to the general public had ever obtained planning permission.

    So could you please put me right by giving further details of the sites at Cambourne, Haydon and Romsey. When was this, and were the plots at these sites sold by UKLI Land Investments Group, or by Landhold Capital Ltd?

  4. It seems to me that the SJ Capital Group plot sizes are small, and it would be a bit tight to try to build a house on them. The website at www.customhomes.co.uk (http://www.customhomes.co.uk/plot_sizes.html) says that "The average estate house is built on approximately 1/12th - 1/10th of an acre, about 38ft x 95ft (11.5m x 29m)". That's 333 square metres, whereas your plots on your latest sites at Houghton Regis and Burlesdon are only 250 square metres. Are these plots big enough to build on?

    Obviously, I don't have the benefit of your expertise, and perhaps you have some clever way to fit a house on a tiny plot?

  5. Again, I'm just a lay person, not a land planning expert like you, but personally I would be surprised if any developer would ever touch with a barge pole any site which had been sold off as plots to individual investors for the following reasons:

    - Firstly, any developer interested in buying the plots would need to contact each of the individual plot owners and negotiate directly with them. If one or more plot owners refused to sell (e.g. because they wanted to keep their plot to build their own house on it, or because they wanted to hold out for a high price) then the developer's project would be dead in the water.

    - Secondly, the land would be comparatively expensive for the developer to buy because the land plot company has taken a good chunk of the potential development profit for itself already, through the high prices charged to the individual plot owners. The plot owners are expecting a good profit too, so they will be looking for a good return on the price they paid. Surely, it would be a lot more expensive than normal for a developer to buy such a site?

  6. I also don't see how any site divided up into plots could ever be developed.

    If the plot owners couldn't sell to a developer, for the reasons given above, they might instead want to build houses on their plots on an individual basis. But surely this would not be permitted, because there would be no connection to utilities and no access road. Individual plot owners would not have any ownership rights over the land needed to connect the utilities or to build the access road - so that would be impossible too.

    Furthermore, planning permission to build houses on each of the small plots would be unlikely to be given anyway, because it would result in too high a density of housing.

    In effect, it seems to me that dividing a site up into a large number of individual plots does the opposite of what you say it will do. You say that it will enable small investors to gain a foothold in the UK land development market. But in practice, surely it means that it puts the kibosh on any chance of the site ever being developed?

    Or am I missing something?

  7. In November 2011, there were some rude comments on the forum at Trade2Win about Landhold Capital Ltd, SJ Capital Group, yourself and Paul Charney LLB (Hons). In response SJ Capital Group posted a response on their website at www.sjcapitalgroup.com/media.html. Headed "Inaccurate and Defamatory Comments Posted On Trade 2 Win Forum", the response said that the Trade2Win commentators needed "to do proper research on the companies you hastily tar with the same brush, wilfully quoting inaccuracies and insulting any individual who dares question your basis which is a travesty no different to the scams you try to expose".

    I would like to raise questions on two points made in this response.

    Firstly it says that:

    "We are not a land banking company. We do not associate ourselves with either that industry or rogue land selling companies who do nothing more than sell plots without ever pursuing planning permission. Comparing us with them is both inaccurate in terms of due diligence and an injustice to the professional and acknowledged work we do. The business model is that of a fully operating Strategic Land and Planning company. This practice is the “house builder land and planning” model, in the same manner as the larger Strategic Land companies and the Strategic Land funds.

    The key difference between the models is the quality of the sites purchased (more about that later) and the proactive pursuit of planning permission, both of which we practice."


    I've already asked about whether any of the sites you've been involved in buying over the past 7 years has achieved planning permission and whether any plots have been sold to developers, which will give some idea of the quality of the sites purchased.

    You then go on give links to "some articles from highly reputable sources" about research from Cordea Savills, the European fund manager. The first two links are to press releases from Cordea Savills in 2007 (i.e. before the crash). The first press release dated August 2007 says that "there is a massive shortfall in housing in the UK" and that "investors now have the opportunity to enhance their returns by investing in 'strategic land'". The second link is to a press release a couple of months later, in October 2007, announcing the launch of Cordea Savills "UK Property Ventures No. 1 Fund". The third link is to a press release dated February 2009 which announces that Cordea Savills plans to raise up to 500 million pounds from investors through a new strategic land fund to buy undeveloped UK land and have it re-zoned to sell to home builders.

    But it seems to me that these press releases are talking about something crucially different to what Landhold Capital and SJ Capital Group are doing. The Cordea Savills business model is to buy up undeveloped sites, get them re-zoned and sell the sites to developers. With Cordea Savills, the sites are owned intact by their investment fund, and investors in the fund finance the project and receive a share of the development profit when the fund sells the site.

    The business model of SJ Capital Group and Landhold Capital contains the additional, fatal step of dividing up the land into individual plots which are sold to members of the public, before trying to get planning permission. I say that this additional step is fatal to any prospects of development for the reasons stated in question 5 above.

    Am I missing something here?

    Secondly, the response says that you "did consult for UKLI, he was recruited from Taylor Wimpey in order to assist both UKLI and the administrators to "sort out the mess" that had been created". I know that you were not a director of UKLI, but you were in fact recruited by UKLI in 2005 from Taylor Wimpey. Exactly when you left UKLI I don't know, but according to the company's website you were still there towards the end of 2007, before the Financial Services Authority made their move against UKLI, and before any administrators had been appointed, which didn't happen until May 2008.

    Is there some mistake here?

I will add Brian Smith's replies here when I receive them.

Derek Lawrence BTP MRTPI MRICS

A "Chartered Town Planner and Chartered Surveyor with over 30 years' experience", Derek Lawrence BTP MRTPI MRICS held the position of Planning Director at UKLI. Just as with Brian Smith BA (Hons) MRTPI, UKLI's Strategic Land Director, no doubt Derek Lawrence's string of qualifications and long years of professional experience was unfortunately reassuring to UKLI investors, just like that of Brian Smith.

On leaving UKLI, Derek Lawrence worked for a while with a large planning consultancy firm in London. However, he's no longer shown in the list of personnel on the firm's website.

I couldn't find any trace of where Derek Lawrence is working now.

Bally Chohan

Where is Bally Chohan now?

Possibly he is now involved with SJ Capital Group, a South African company with a website at www.sjcapitalgroup.com, which buys UK land without planning permission and divides it up into plots to sell to residents of South Africa.

I've asked Paul Charney whether this is the case, as my final question to him, above.

Nigel Walter

I couldn't find any trace of Nigel Walter's current whereabouts or his current activities.

Nigel Walter resigned as a director of Connaught Asset Management on 2nd February 2009, having transferred his 6 shares in the company on 1st February 2009.

Connaught Asset Management promotes Unregulated Collective Investment Schemes (UCIS), which is perfectly legal subject to certain rules. A couple of years after Nigel Walter left, in 2011 the company was the subject of a warning from the Financial Services Authority:

http://www.fsa.gov.uk/consumerinformation/firmnews/ 2011/connaught.shtml

Nigel Walter has resigned his UK company directorships and not taken up any new ones according to records at Companies House.

Robin Barton, Solicitor, General Counsel

Robin Barton's LinkedIn profile says that in November 2010 he resigned his position of legal counsel at the mysterious Dubai company UK Capital Investments Group (see page one - link) and that he is now a freelance consultant.

Robin Barton's LinkedIn profile does not mention his involvement with UKLI, either.

Final advice to anyone thinking of buying a land plot from any company

Some people have denounced the sale of agricultural land plots as a scam. But can you really say it's a scam when you bought a small plot of land and that's what you received - a small plot of land?

The problem arises if you bought your plot and paid a high price for it because you thought that it had realistic chances of obtaining planning permission in the not-too-distant future, and it turns out too late that it hasn't.

There's a simple way to make sure that this doesn't happen to you. Before you buy, make sure that you engage an independent qualified chartered surveyor to value the plot for you. And make sure that this surveyor is somebody who has never had any contact whatsoever with the company selling the land plots.

If you still decide to go ahead, then you should engage your own independent solictor to handle the transaction for you. Again, this solicitor should be somebody who has not had any prior contact with the company.

_________________________________

 

Go Back to Page One

1. Review
Extract from Business Opportunity Watch Rating Reviews, October 2007 Issue 8

2. Editorial Postscript of 13th September 20083. Events after October 2007

Go Back to Page Two of Three

4. BOW Letter to Jonathan Phelan of the FSA

5. Can plot owners get a refund from their banks?

6. FSA Reply dated 5 November 2008

7. BOW Reply dated 31st December 2008

 

_________________________________

End of review of UK Land Investments

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