Illicit precious metals investment schemes lead to 14-year ban on director of Caledonian Ltd

Maria Nikolova

Caledonian Ltd and Caledonian Commodities Ltd misappropriated £570,000 for a variety of investments, mostly in precious metals, as well as carbon credits and rare earth metals.

The UK Insolvency Service has announced that a ban was imposed on Ozden Hassan after findings that the companies he operated lured people to invest in dubious precious metal schemes.

Ozden Hassan was the sole director of two companies offering ‘alternative investments’ – Caledonian Ltd and Caledonian Commodities Ltd. The companies offered a range of alternative investment opportunities in commodities such as carbon credits, rare earth metals, gold and coloured diamonds.

However, customer complaints triggered an investigation by the Insolvency Service before the two companies were wound up in November 2016.

During the hearing the Court heard that the companies’ representatives systematically took funds from customers using misleading tactics. False claims included that investor funds would be used to buy physical gold items, such as bars and coins, which would then be kept in secure storage, and that they would own that gold.

However, in reality, customers’ funds were used to buy ‘unallocated gold’ or speculations in gold futures which were bought in the name of the companies and not the investors. Thus, customers had no stake in any of the gold, which was sold to pay running costs of a separate business.

During the hearing, the two companies insisted they had no obligation to use funds to buy gold or to hold gold of equivalent value to the amount purchased by investors and they were providing investors with a platform for spread betting on the price of gold.

Investigators concluded that Caledonian and Caledonian Commodities took approximately £570,000 for a variety of investments, mostly in precious metals, but also in other investments of dubious value including carbon credits and rare earth metals.

At the winding up hearing the judge found that “the business of the companies has been conducted in a way which does not meet accepted minimum standards of commercial behaviour” and “trading involved mis-selling which, in a number of respects, can only have been deliberate.”

Effective from 22 November 2018, Ozden Hassan is now banned for 14 years from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

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