Glass recycling business crushed

A group of companies headed by Magna Group plc (Magna plc), has been wound up following an investigation by the Insolvency Service.

A group of companies headed by Magna Group plc (Magna plc), has been wound up in the High Court following an investigation by Companies Investigation Branch (CIB) of the Insolvency Service.

A group of companies headed by Magna Group plc (Magna plc), has been wound up in the High Court following an investigation by Companies Investigation Branch (CIB) of the Insolvency Service. The group claimed to be capable of making massive profits from the extraction of Polyvinylbutyral (PVB) from recycled glass sourced from vehicle windscreens,

The groups recycling plant near Selby in North Yorkshire failed to generate anything other than peripheral orders, mainly for recycled glass as a by-product. These sales totalled less than 40,000 over 3 years., Prospective shareholders had been told that the group would be generating turnover in the tens of millions of pounds within 2 years of starting operations. Other claims made to shareholders concerned the existence of imminent orders that never materialised, expansion plans that did not come to fruition and the value of the business, which included one valuation of 150 million that proved to be totally unfounded. In fact the group was heavily insolvent, with estimated creditors in excess of 1.1 million as at the date of winding up.

Magna plc failed to comply with Financial Services Authority (FSA) regulations governing the sale of investments. Due to the failure of the company to keep proper records, it was unable to provide an accurate account of how many shareholders it has. CIB estimated that it had received up to 2.3 million from purchasers of preference shares, of which over 40% of that sum was paid over to a third party share selling agent employed by the company.

Since re-registering Magna plc as a plc had one recorded director in contravention of Companies Act requirements for a minimum of two directors to be in post in a public limited company.

The petitions were presented under Section 124A of the Insolvency Act 1986.

The registered office of all four companies is at 7 Highfield Road, Hall Green, Birmingham, B28 0EL.

The Official Receiver was appointed as the provisional liquidator of the four companies on 11 February 2009.

All public enquiries concerning the affairs of the companies should be made to: The Official Receiver, Public Interest Unit, 2 nd Floor, 3 Piccadilly Place, London Road, Manchester, M1 3BN. Tel: 0161 234 8531.

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Further information about the work of The Insolvency Service is available from