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Inside Out investigates a scam into buying a piece of the Dorset countryside
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It sounds like the perfect deal - buy a piece of the English countryside, apply for planning permission and sell it on to developers for a huge profit. But investors are being tricked into handing over thousands of pounds for land in Dorset that has no chance of ever being built on.
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An investigation by 91Èȱ¬ South's Inside Out programme has exposed one 'landbanking' company that has convinced investors to pay above the odds for sites that have little or no development potential.
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Commercial Land, formerly European Land Sales Partnership (ELS), specialises in buying agricultural land and dividing it into tiny plots, which it then sells to investors at £5,000 for every 0.02 acre.
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It tells investors they could get a five-fold return on their money if planning permission is granted. What it does not say is that the development potential of the sites it is touting is non-existent.
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Three employees tried to convince Inside Out journalists posing as potential investors to hand over £10,000 for a small piece of land in Dorset that planners are adamant can never be built upon.
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Commercial Land - which has never won planning consent for any of its holdings - is currently marketing a four-acre site near the hamlet of King's Stag.
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During a meeting at the company's London headquarters, a salesman claimed that North Dorset District Council had written to them saying the land in King's Stag was "Suitable for housing and also for commercial use".
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Another salesman said that between £30,000 and £50,000 could be made from a £10,000 investment, claiming that the quiet rural hamlet would soon be part of the suburban sprawl.
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He said: "Go back there in five, six years down the line and it will be very built up."
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The company's own in-house planning specialist went on to claim it would not be long before planning permission - for either residential or commercial use - was secured.
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He said: "It's just a matter of time to see when we get planning permission in 2008 so it's not too far away. They (the council) are always saying this is what we need at the moment."
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In fact, North Dorset District Council has told the 91Èȱ¬ that there is no chance of development, not least because the area actually has an oversupply of homes.
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Nick Fagan, the council's development control manager, said of the chances of the site winning planning permission: "Zero, nothing - there's no chance at all of ever getting planning permission here.
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"We did send them a letter. It said there's no chance of developing this land, basically ever. I feel this company is trying to sell land to people on a fraudulent basis. They are cowboys and they should be closed down."
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If the company successfully sells all 112 plots at King's Stag, it will make about £750,000.
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Its main partner, Stephen Cleeve, paid just £30,000 for the site in September 2005.
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In a statement, Mr Cleeve said a new member of staff had made a genuine error when he told the 91Èȱ¬ journalists that North Dorset District Council had given them positive feedback in writing.
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The letter the salesman was referring to was actually from the company's own planning consultants.
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He added: "We are not free to discuss our planning processes as this could prejudice our chances of gaining the relevant permission and as such would be doing our clients a disservice.
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"European Land Sales is a bona fide organisation and has a strict disciplinary code. Any breaches of our code are dealt with quickly. Several employees have already been disciplined."
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Mr Cleeve, who is banned from being a company director for eight years after a previous investment scam, has already been the subject of a public warning issued by the Australian authorities over his tactics in selling UK land overseas.
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In this country, the Serious Fraud Office - despite deciding not to prosecute Mr Cleeve - has said there is evidence that investors have been misled by ELS in the past.
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The company's sales tactics have certainly proved a success for Mr Cleeve over the years.
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In Oxfordshire, ELS made hundreds of thousands of pounds from investors by selling land it said was ripe for development. Investors were not told, however, that the land near Eynsham lies in the Oxford greenbelt and in a floodplain.
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West Oxfordshire District Council says that it will never allow building there.
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One of the many investors who spoke to the 91Èȱ¬ about how they were convinced to part with their cash is Satish Mehta.
The 70-year-old retired GP from Stockport paid £7,600 for his plot back in July 2004 and was told the land was likely to be included in the local development plan.
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He said that he felt he had been "led up the garden path," and added: "I can see I have been conned."
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JR
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