By Claire West

A Yorkshire-based company which received advance payment from numerous customers for sports equipment which it then failed to supply has been wound up in the High Court following an investigation by Company Investigations of the Insolvency Service.

Argos Sports (UK) Limited, which has no connection with the high street retailer known as Argos, sold sports equipment to the public through the website The company’s trading succeeded that of an associated company, Argos Sports Limited, which went into compulsory liquidation in July 2008 with an estimated deficiency of £1.18m, mainly comprised of liabilities to suppliers of sports equipment. Argos Sports (UK) Limited appears to have used the same website as that previously used by Argos Sports Limited in order to effect internet sales and there were common features in the control of the companies, even though they did not share named company officers.

Commenting on the case, Investigation Supervisor, Colin Cronin of The Insolvency Service, said;

“Companies that deliberately set out to mislead customers and fail to produce the goods and services they claim to offer undermine the confidence the public has in business. The Insolvency Service regards this as serious misconduct and the action taken in this matter sends a clear and simple message to company directors — if you run a business that seeks to cheat customers and trading partners you will be closed down.”

In winding-up Argos Sports (UK) Limited the High Court found that there was a lack of transparency in the control of the company such that past and present directors could either not be traced or explain with any clarity the sequence of governance of the company. In particular, numerous complaints had been made by members of the public to the Consumer Direct division of the Office of Fair Trading during a period when the true ownership and control of the company could not be established. The complaints typically involved a failure by the company to supply goods paid for in advance by customers. In addition, no accounting records were produced during the investigation to explain how the company’s income of £1.8m was spent and whether the transactions shown on the company’s bank account (particularly substantial loan transactions) were in the best interest of the company and its creditors.