All that glitters is not gold (or diamond)
It has been reported that Dan Edgar, a star of constructed reality TV show The Only Way Is Essex, recently signed a disqualification undertaking for 14 years following an investigation by The Insolvency Service. This means that Mr Edgar cannot be involved in the promotion, formation or management of a limited company for the length of the undertaking. The investigation related to Mr Edgar’s involvement in Reco Commodities Limited, which was wound up in the public interest in 2015 for making numerous false claims and failing to purchase diamonds that investors had already paid for, leaving customers out of pocket to the tune of over £400,000. The firm inflated the price of diamonds making them unsuitable as an investment vehicle and used “boiler room” sales tactics to obtain investment from customers.
This follows a spate of diamond investment companies being shut down or liquidated in the past couple of years, with the directors being disqualified from acting as directors in the future for lengthy periods of time. These companies all had a similar modus operandi – high pressure sales techniques, false investment claims and over-priced diamonds. In one case, diamonds were marked up by as much as 550% and the companies often targeted the elderly and vulnerable.
It is pleasing that The Insolvency Service has taken such a firm stance on these companies and obtained lengthy disqualification orders or undertakings to protect the public from the directors. It goes without saying that if an investment appears too good to be true that it inevitably always will be. Proper advice should always be sought before making any kind of investment decision.