Two linked textile companies that carried out bogus collections have been forced by the High Court to stop trading.
The Birmingham-based Air Ambulance Recycling Limited and E&N Textiles Limited were wound up on Tuesday (May 22) in court following an investigation by the Companies Investigation team at The Insolvency Service.
The investigation found that the company directors – Mr Algirdas Gribenas and Mr Evaldas Guoga (as listed on Companies House) – targeted residents across the UK via charity bag drop offs and collections. The Insolvency Service said the companies made misleading representations that the proceeds raised from the onward sale of unwanted clothing would be donated to local air ambulance charities, however no evidence of the donations was found.
The Insolvency Service carries out confidential enquiries on behalf of the Secretary of State for Business, Innovation and Skills (BIS).
Commenting on the decision by The High Court, Alex Deane, investigation supervisor at the Insolvency Service, said: In winding-up these companies, the Court has sent a clear message that it is unacceptable to mislead the public and exploit their goodwill towards emergency services and the Insolvency Service will seek to have such companies closed down.
We are also aware that these companies ordered a significant quantity of collection bags for distribution whose whereabouts are currently unknown. If you do receive collection bags bearing the names of either of these companies please destroy them so that they cannot be used again.
The companies were formed on June 21 2011 and the investigation was undertaken soon after. The office of Air Ambulance Recycling Ltd was based at 236 Lozells Road, Birmingham. This was also previously the registered office of E&N Textiles before it was relocated to 568 Moseley Road, Birmingham.
The investigation found that the companies attempted to pass themselves off as authorised collection agents by making charity bag drops in residential areas, with attached leaflets bearing similarities to the logos of official air ambulance charities. At no time throughout their trading histories were they ever authorised by any air ambulance service to act as charity fundraisers.
The activities of the companies were also found to be in breach of regulations contained in the House to House Collections Act 1939 concerning door-to-door leaflet dropping where charitable purposes are included. The Act requires companies conducting collections for charitable purposes to obtain a licence however The Insolvency Service said that neither of the companies had done so.
In October 2011 E&N Textiles were contacted by the Advertising Standards Agency (ASA) which ruled that the advertising on the leaflet, describing the companys work with the Air Ambulance Service, was misleading and that it must not appear again.
A spokesman for The Insolvency Service told letsrecycle.com that the investigation was still ongoing and that it could result in the directors being disqualified from owning a limited company for up to 15 years or legal proceedings.
He said: We have a duty to investigate further and it depends on where the investigation leads us. If we find anything untoward we have two years to bring proceedings for disqualification against them or if we find something stronger we can hand it over to the legal department of Business, Innovation and Skills and they can bring criminal charges.
The Textile Recycling Association (TRA), the UKs trade body for used clothing and textile collectors, sorters and reprocessors said that it condemns activities that deceive the public and encourage its members to uphold standards. The organisation confirmed that neither of the organisations involved were TRA members.
Alan Wheeler, national liaison manager for the TRA, told letsrecycle.com: The TRA strongly condemns the activities of those that set out to deceive the British public, by giving the impression that they are collecting on behalf of bona fide charities. We equally condemn the activities of thieves who simply go out and steal bags of clothing put out for legitimate collections. We have been very proactive in trying to tackle these issues. We helped the police to set up an intelligence gathering unit at the National Fraud Intelligence Bureau and we also part funded a toolkit which was produced for members of the Trading Standards Institute to help them secure prosecutions.
In addition to this, all our members are expected to uphold the standards set out in the Institute of Fundraisings/Fundraising Standards Boards revised code of practice for charitable door to door collections.