According to Government officials, Intercontinental Wines, a fine wine investment company in Southampton, Hampshire, found itself in the UK’s High Court after misleading its customers about the level of purchases and the storage of their fine wine investments.
Claiming to be a wine broker, the bogus firm used “high-pressure cold-calling methods” to persuade would-be wine investors to part with their money, the court heard.
According to the Insolvency Service, the business made sales worth £460,000 between March 2015 and February 2017, but only purchased £100,000 worth of wine.
This meant that, without realising, clients would need the value of the wine to increase by more than 400% to at least break even.
“Intercontinental Wines enticed customers with the promise of attractive returns from building a portfolio of fine wines, entrusting the company to make purchases and store wines at bonded warehouses on their behalf,” said Irshard Mohammed, senior investigator and case manager at the Insolvency Service.
“However, the company blatantly failed to do so in the vast majority of sales made and instead took customers’ funds on face value, frittering it away on unexplained or personal expenditure.”
Customers were left red-faced and angry after being led to believe that the wine would be stored in bonded warehouses under personal accounts.
When investigators obtained the company's banking records, they were able to prove that only a small proportion of sales proceeds were used to purchase wine.
Instead, the company’s bank accounts were used for personal expenditure.
“These winding-up proceedings show that we will take firm action against companies that operate in such an unscrupulous way,” Mohammed added.