Firms wound up following enquiry

The firms were found to have 'seriously' misled the public

Three related firms from Greater Manchester have been wound up for misleading the public.

The Companies Investigation Branch (CIB) of the Insolvency Service has closed Rosshoe Ltd, UK Fundraisers 2004 Ltd and Combined Trading Services.

In 2003 Rosshoe in Tameside collected more than £800,000 in charity funds but distributed just £50,000.

UK Fundraisers 2004, Salford, donated just 4.5% of £1m and used funds to finance Combined Trading Services.

All three companies were registered at the same Stockport address in Wellington Road, but UK Fundraisers Ltd 2004 changed its business address to one in Cadishead, Greater Manchester, in August 2006.

Investigators for the Insolvency Service discovered that Rosshoe Ltd claimed to be a footwear-recycler and was active between 1999 and 2003.

However, the firm also acted as an agent for a series of charities in a telephone fund-raising enterprise that targeted small and medium sized businesses and in 2003 distributed less than 7% of donations collected.

Kept afloat

The Insolvency Service also found that UK Fundraisers 2004 Ltd used a combination of telesales staff and collectors to obtain funds from commercial donors but was not affiliated to any charity.

After deducting its own running costs, the firm claimed to distribute half the funds to child-related charitable, benevolent or philanthropic causes.

But investigators found that only 4.5% of more than £1,000,000 was paid out to good causes between February 2004 and July 2005.

The company was in breach of charity legislation by failing to inform donors exactly how much would be given to the good causes and its record keeping was so poor that it was impossible to ensure all money donated to specific causes actually went to that cause.

Instead, it was discovered that Manchester-based Combined Trading Services Ltd - an unprofitable textile recycling company - was relying on loans received from donations made to UK Fundraisers 2004 Ltd to keep it afloat.

The amount owed increased steadily over time and, by August 2005, amounted to more than £140,000.

In making the orders, the High Court recognised that there had been a serious misleading of the public as well as a lack of commercial probity.