Two companies have been hit with a winding up order after an Insolvency Service investigation discovered they were involved in illegal landbanking activities.
Landbanking usually consists of a firm buying a large area of green or brown belt land and splitting it up into plots to sell individually with the idea that planning permission might be granted, when in some cases there is absolutely no chance of this happening.
However, while Regency Land Sales and Regency Land Group were guilty of this, they were also found to have attempted to sell land they did not own.
Based in London, Spain and Belieze, the firms were found to have been operating illegally and have therefore been closed down without the opportunity to speak to insolvency practitioners as would normally be the case if a company was in financial trouble.
The enterprises were connected in that Regency Land Sales operated as Regency Land Group's UK-based sales agent.
Having previously investigated and closed down Britannia Land Management for similar activities in the Grantham area in 2010, the Insolvency Service was quick to investigate reports that Regency was acting as a landbanking agency.
Among the numerous issues was the fact that investors had been offered a "guarantee" of eight per cent growth over the first year, which was an inaccurate promise.
The secretary of state for business, innovation and skills applied to the High Court on September 7th for the Official Receiver to be appointed as a provisional liquidator of both entities.
This was granted in order to protect assets in the possession of the firms until the situation is wholly resolved.
Meanwhile, three companies involved in the provision of wills and trusts writing services were recently handed winding up orders following an investigation by the Insolvency Service.