Finance company shut down after investigators uncover fraud concerns

A financial services company that took £175,000 from a client for a guarantee it never provided has been wound up in the public interest by the High Court. The Insolvency Service investigation revealed that Basic Prime Limited, which claimed to be based in Croydon, operated with no genuine business presence, non-functional contact details, and a director who failed to cooperate with enquiries.

The company, incorporated in October 2023, purported to offer trade finance guarantees and credit enhancement services but was not registered with the Financial Conduct Authority. Investigators suspect it was running an advance fee fraud scheme, targeting clients with promises of high-value standby letters of credit.

Background and Context

Basic Prime Limited presented itself as a specialist in credit enhancement, project finance, and payment guarantees using instruments like standby letters of credit—bank-backed promises often used in international trade. However, its operations raised immediate red flags when a client paid a $231,000 (£175,000) upfront fee in April 2024 for a $500 million (£382 million) guarantee that never materialized. By September 2024, the company had ceased all communication with the client.

The case highlights ongoing challenges in regulating entities that claim to provide complex financial services without proper oversight. Advance fee fraud schemes, where victims pay upfront for services that are never delivered, remain a persistent threat in the financial sector, particularly when operators exploit opaque corporate structures.

Key Figures and Entities

Basic Prime Limited (company number 15183902) was incorporated with a claimed £1 million in paid-up share capital, but its accounts suggested this capital was never actually paid. The company’s sole director, whose identity is not publicly disclosed in filings, could not be contacted despite repeated attempts. Letters sent to addresses associated with the director were returned, with recipients denying any connection to the company or its director.

Mark George, Chief Investigator at the Insolvency Service, emphasized the agency’s commitment to cracking down on such operators. “Companies that take money under false pretences and then disappear will not be allowed to trade,” he said in a public statement.

Legal and Financial Mechanisms

Investigators uncovered multiple irregularities in Basic Prime Limited’s operations. The company claimed to hold an account with a major bank in its client agreement, but the bank confirmed it had no relationship with the firm. Despite receiving the $231,000 fee in May 2024, the company filed dormant accounts showing no trading activity.

The Insolvency Service’s investigation, which began in May 2025, also revealed that the company’s registered office in Croydon was a managed office space where it had no actual presence. Its listed email addresses and telephone number were non-functional. These findings, combined with the director’s refusal to provide business records, prevented investigators from establishing the company’s true financial position or the extent of its operations.

International Implications and Policy Response

The winding up of Basic Prime Limited underscores the need for stricter transparency rules for financial services providers. The company’s ability to operate without FCA registration and misrepresent its banking arrangements highlights gaps in cross-border regulatory enforcement. The case may prompt renewed scrutiny of how advance fee schemes are detected and prosecuted, particularly as they often target vulnerable clients seeking high-value financial guarantees.

The Insolvency Service has urged the public to report suspicious corporate activity, noting that it can investigate live companies for serious misconduct, fraud, or dishonest practices. The Official Receiver has been appointed as liquidator, and all enquiries about the company’s affairs should be directed to the Public Interest Unit at piu.or@insolvency.gov.uk.

Sources

This report draws on Insolvency Service announcements, UK Companies House filings, and public statements from the Financial Conduct Authority. Information about the Insolvency Service’s role in investigating corporate abuse is available here.