MH Carbon goes into voluntary liquidation

In January 2013, REDD-Monitor wrote about MH Carbon, a company selling carbon credits to the public as investments. REDD-Monitor’s question, as with any company doing this, is whether the company is a boiler room scam. Last week, MH Carbon went into voluntary liquidation.

According to a notice on MH Carbon’s website a company called Parker Andrews in Norwich, UK, that specialises in insolvency “has been instructed to deal with the liquidation of carbon credit trader MH Carbon”. The notice, which is not dated, explains that MH Carbon will be “placed into voluntary liquidation shortly”. However, only creditors have been contacted about the liquidation. People who bought carbon credits from MH Carbon “will not receive official notification of the liquidation”.

Liquidation is the process of closing a company and selling off the company’s assets and property (in order to pay off the company’s creditors, for example). Voluntary liquidation is supported by the company’s shareholders, as opposed to the company being forced into liquidation by creditors or a court order.

In the case of MH Carbon, the company’s shares are 100% owned by a company called PCS Nominee Limited, which is registered in the Isle of Man.

REDD-Monitor’s post about MH Carbon attracted a large number of comments (currently more than 160 comments) many of which are from people who have bought carbon credits and are concerned that they are victims of a fraud.

I wrote to the director of MH Carbon, Jeffrey Razaq, to ask him what the implications of the liquidation are for people who bought carbon credits from MH Carbon. The email was returned, with an error message stating that, “it was rejected by the server for the recipient domain mhcarbon.com”.

I have also written to Parker Andrews to ask the same question.

MH Carbon’s voluntary liquidation raises several questions. As far as I am aware, the company only sold carbon credits. Last year, MH Carbon claimed to be, “one of the UK’s fastest growing participants in emissions spot trading within the voluntary carbon credit market”. It seems a reasonably safe bet that MH Carbon bought the carbon credits for less than its brokers sold them for. So where do the company’s debts come from? And where did the money go from the sales of carbon credits?

In the company’s annual accounts for 2012, MH Carbon had about £1.7 million in assets and about £1.6 million owed to creditors. MH Carbon has not filed this year’s accounts with Companies House. So how did the company manage to become insolvent? Is the company going into liquidation because too many clients are asking for their money back? Or is the National Fraud Intelligence Bureau getting too close?

Jeffrey Razaq is also director of two other companies that include “MH” in their names: Mh Carbon Nominees Limited and Mh Commodity Brokers Limited.

It’s interesting to note that Anna Rickard was a director of Mh Carbon Nominees until 24 October 2012 – the date that Jeffrey Razaq took over as director of MH Carbon and Mh Carbon Nominees. Anna Rickard is the director of Citadel Trustees, a company that used to act as an “Appointed Custodian” to Worldwide Commodity Partners, another company selling carbon credits to the public as an investment. All the shares in Mh Carbon Nominees are owned by Citadel Secretarial Services Limited and Citadel Nominees Limited.

On 14 January 2013, Lee Thompson, the director of Worldwide Commodity Partners wrote to the company’s clients explaining that, “As part of the negotiations between our companies it has been agreed that MH-Carbon will take over our portfolio in full.”

When journalist Tony Hetherington asked Anna Rickard some questions about Citadel Trustees’ role, she replied, “It would only be unethical for Citadel Trustees to knowingly and intentionally involve itself in a scam.”

According to comments on REDD-Monitor (archived here¹), a Luxembourg-based company, Carbon-ex S.à r.l., is also involved in the sale of MH Carbon’s carbon credits.

It will be interesting to see how the voluntary liquidation proceeds and how much of the tangled web of carbon credit deceit begins to unravel as a result.

1. Search for “Carbon-ex” on this archived page for the relevant comments.