FTAdviser.com

Advertising

The financial watchdog also claims that the business denied its investors protection for their money.

Since the FSA's petition was filed, Lee Manning and Carlton Siddle of Deloitte have been appointed as joint administrators of UKLI.

The administrators are understood to be in the process of contacting all investors who have bought land from UKLI with more information on what will happen next.

In a statement, the FSA said UKLI advertised and sold plots of land, claiming that it could get planning permission for the land which would increase its value and make investors significant profits once it was sold to a developer.

About 4,500 investors are understood to have paid a combined £69m to buy the land. However, none of the land sold was ever granted planning permission.

The FSA claimed UKLI’s business was illegal because it operated as a CIS and should have been authorised by the FSA.

But, unfortunately for investors, the lack of authorisation means they are not entitled to make a complaint to the Financial Ombudsman Service (Fos) or to claim compensation from the Financial Services Compensation Scheme (FSCS).

The FSA has also been granted an interim freezing and restraining order against UKLI to protect its assets for creditors, including investors and to prevent it from continuing to operate as an illegal CIS.

Jonathan Phelan, Head of Retail Enforcement at the FSA, said: "People invest to provide a better life for themselves and their families. The FSA will not hesitate to pursue companies like UKLI which offer unauthorised and illegal services which put such investments at unnecessary risk."