FSA seeks closure of illegal land scheme

An illegal investment land scheme which prompted people to pay money into a fund for land that was never subjected to planning permission should be ordered to close, the Financial Services Authority (FSA) has told the High Court.

Britain's biggest land banking company, UKLI, operated as a collective investment scheme without authorisation by the FSA, which the regulator states is illegal.

As a result, investors who paid into the scheme were not afforded the right to claim compensation or make a complaint as they are under the rules FSA-accredited companies are bound by.

The FSA has already had an interim freezing and restraining order granted against UKLI.

Head of retail enforcement at the FSA John Phelan said: "Our action, against UKLI, should serve as a warning to other companies that might be breaking the law in this way."

The practice of land banking has often been criticised for holding back the development of much-needed new homes.

A group of councils in the Scottish Highlands has raised this issue over developers in the Lochaber area.

The Association of South Lochaber Community Councils made its concerns apparent in representations to Highland Council chief Alistair Dodds over a new waterfront development in Fort William, the Press and Journal reports.