By Marcus Leach
A company selling advertising space in a business-to-business information booklets has been wound-up by the High Court in Manchester following an investigation by the Company Investigations of the Insolvency Service.
Clear Sky Communications Limited (Clear Sky) operated a business of the type that has become known as “Support publishing”. The company sold advertising space in business-to-business booklets containing general information on subjects such as Road Safety, Drugs Awareness and Fire Safety.
Investigators found that the company misled advertisers into believing that the booklets represented “a high quality, low cost method” to promote their business.
Evidence obtained during the enquiry found that;
- There was no commercial benefit from placing an advert commensurate with the company’s claims in making sales
- Despite claims that up to 1,000 booklets would be produced and distributed, there was no evidence that this was the case
- Some businesses were targeted for payment even though they had not agreed to place advertisements
- Despite the above, the company harassed and bullied businesses for payment, issuing invoices in excess of £400,000 to over 1,400 businesses between October 2008 and June 2011.
Due to inadequate trading records, cash withdrawals of £56,000 and other payments from the company’s bank account remained unexplained.
The court heard that the company was a continuation of Rose Garland Limited (in Liquidation), a company which operated the same type of objectionable business and which was also Wound-up in the public interest in 2009.
“The Insolvency Service carries out a range of investigation and enforcement activities aimed at supporting fair and open markets," Alex Deane from Company Investigations Manchester said.
“Clear Sky promoted itself as something it was not, selling advertising space which did not benefit the clients in any way, contrary to the rules of fair and open competition.
“The Insolvency Service will pursue companies acting in a dishonest way until we find them and take steps close them down.”
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