‘It’s strange. The house got a letter’ How a Lanarkshire property became the ‘owner’ of mysterious shell firm
A SCOTTISH semi-detached house has been officially listed as the sole owner and controller of a limited company, The Herald can reveal.
The modest, rough-cast property in the Lanarkshire village of Carnwath is the only director of a newly-minted business set up earlier this month.
The building is also listed as the person of significant control – the ultimate beneficiary – of an otherwise anonymous firm called MBDSASF Limited.
The filing, recorded by Britain’s corporate registry Companies House on March 11, caught the eye of corporate fraud expert Graham Barrow.
It is, Barrow stresses, impossible for a lump of bricks and mortar to own or control anything. Companies House is already investigating the filing and has moved the firm’s official address to the agency’s Cardiff HQ as it does so.
But Barrow said the fact a building – rather than a person or a corporation – could be officially listed as the owner of a firm should be raising red flags.
He told The Herald on Sunday: “This underlines the urgent need to speed up the reform of Companies House.
“It is still possible to declare the sole owner and director of a newly-formed company to be an address, leaving anyone enquiring into the true ownership or control of that company none the wiser.”
He added: “Sadly, although this is an extreme example, similar appropriation of innocent people’s names and addresses to create criminal enterprises is still happening on a daily basis.”
No knowledge
THE house – in Couthally Gardens in Carnwath – belongs to Les Gilfillan, a former coal miner, and his wife Elizabeth. They had absolutely no knowledge of the filing until they received a letter from Companies House addressed not to them, but to their home. “It is all very strange,” said Elizabeth. “The house got a letter! We don’t know anything about it.”
The couple joked about their property developing a mind of their own and going in to business. “Maybe it was the Alexa speaker, or artificial intelligence,” laughed Les.
Companies House – after what appears to be an initial automated mail shot – said it was trying to figure out what had happened. “We are looking into this matter,” a spokesman said. “More broadly, we are taking steps to improve the quality of data on our registers.”
The registry has previously been criticised as an “honesty box” where bad actors can make unchecked claims about their names, addresses, occupations and ages. Companies House has previously accepted public filings in the names of Scotland’s biggest whisky makers, and bus operators and train companies, as this newspaper has revealed. None bore any relation to the real firms.
It has also listed babies as directors and recorded people claiming to be called Stalin as business owners.
An Italian later linked with the mafia described his job as “chicken thief” in official filings.
A controversial Edinburgh company formation agent and host of shell firms – the late John Hein – created joke or prank companies, including one called the United States. The Carnwath house, however, may be the first building to own a firm.
Officials at Companies House stress that they have new powers, thanks to the Economic Crime Act passed last year, to query information filed. And they acted quickly on MBDSASF Limited.
Barrow reckons they have have a lot of work to do: Britain has five million firms on its register, including tens of thousands of opaquely owned entities, not least Scottish Limited Partnerships.
In 2022, The Herald revealed that 10 transport companies had been registered at every flat in a close in Aberdeen. Residents knew nothing about the new business. The same thing has happened again and again across Britain. Whole streets have been targeted for clone, ghost or scam companies using people’s addresses without their permission.
Famous victims
BARROW, a financial crime expert who co-hosts the Dark Money Files podcast, highlighted a story last month when restaurants across the UK discovered they had corporate clones. Victims include Heston Blumenthal, the celebrity chef.
“All across the UK, businesses and individuals are themselves the target of ruthless scammers who use loopholes in British company formation rules to exploit not just their names but their addresses as well,” he said.
“Take, for example, the 800-plus restaurants in London, Manchester, Glasgow, Bristol and a host of other locations which suddenly found post arriving at their premises for a company which looked like theirs but which they’d never heard of.
“An event followed by the arrival of credit cards in the name of the new company, or the energy companies ringing to let them know that the transfer to the new supplier by their new owner would be going ahead shortly, and you realise the scale of the problem.
“But it’s not just businesses. “What about the 80 innocent victims who found themselves named as the directors of all these new, entirely fake, companies of which they had never heard.
“It’s scary. And even more so when the post arrives at your private address, proving that these criminals know exactly where you live.
“These are the sorts of issues faced by thousands of UK residents every year and which are only now starting to be addressed through recent changes to legislation.
“Sadly, the legislation requires a multi-year period to implement, meaning that thousands more are likely to face the same dilemma before things start to noticeably improve.”
Laundering
INTERNATIONAL and domestic criminals have routinely exploited Companies House – and Britain’s soft-touch corporate regulation – to create vehicles for everything for money laundering to fraud.
Last week, The Herald revealed that two men arrested in a major €2 billion mafia money-laundering case were directors and controllers of Scottish and UK entities, including a Glasgow-registered shell firm that went best owing more than £7 million in tax.
Sources in government acknowledge that UK authorities will need time to clear up a backlog of dodgy filings in Companies House.
Ruthless scammers use loopholes in British company formation rules to exploit names and addresses