Investors lose £8 million in care home scheme
Director from Ringwood banned for a decade after he secured investments to fund a scheme to build care apartments despite not having planning permission.
Sean Murray (56) of Ringwood, Hampshire, was the director of CHF 9 Limited, which was incorporated in October 2017.
The company traded as a vehicle to secure investment to build care home apartments and studios in the Grade II listed building and the surrounding lands, near Bishop Auckland in County Durham.
Investors parted with £8.1 million to build 51 care studios having seen marketing collateral, which included plans for 45 studios in the existing building and a further 40 on the surrounding land.
CHF 9 Limited, however, went into administration in December 2019 before entering into creditors’ voluntary liquidation in December 2020.
The company’s insolvency, however, triggered an investigation by the Insolvency Service before investigators uncovered that CHF 9 purchased the Grade II listed building in November 2017 for just over £350,000, as well as the surrounding lands a month later for just over £500,000.
The company required planning permission to make any changes to the exterior or interior before meeting the local authority to discuss plans to build 80 studios.
While the local authority advised CHF 9’s plans would not be possible and suggested 10-15 studios would be more appropriate, Sean Murray sought investment for the project.
Further enquiries found that none of the money secured for the new care studios were paid into CHF 9’s bank account. More than £3.3 million was paid to a connected company and a further £2.8 million was paid to the company’s solicitors before £1 million was paid out of CHF 9’s accounts.
The Secretary of State for Business, Energy and Industrial Strategy accepted a 10-year disqualification undertaking from Sean Murray after he did not dispute that he entered into 51 contracts with investors for care studios in a Grade II listed building when he did not have planning permission.
The disqualification came into effect in May 2022 and the undertaking prevents Sean Murray from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.
Robert Clarke, Chief Investigator for the Insolvency Service, said:
Our enquiries found that the majority of investors would not have invested had they known that CHF 9 didn’t have planning permissions to build the care apartments.
Sean Murray has rightfully been removed from the corporate arena for a significant amount of time. This should serve as a stark warning for potential investors to do your due diligence, as well as making clear to directors involved in investment schemes that we have the powers to disqualify you from running limited companies.
Notes
Sean Murray is from Ringwood, Hampshire, and his date of birth is March 1966
CHF 9 Limited (Company number 11023151)