UKLI LTD (IN ADMINISTRATION) STATEMENT OF PROPOSALS ... · The sole shareholder of the Company is Baljinder (“Bally”) Chohan. There are a number of other entities controlled by

L A Manning and C M Siddle

Deloitte & Touche LLP

PO Box 810

London

EC4A 3WA

UKLI LTD

(IN ADMINISTRATION)

STATEMENT OF PROPOSALS PURSUANT TO

PARAGRAPH 49 OF SCHEDULE B1 OF THE INSOLVENCY ACT 1986

9 JUNE 2008

This report has been prepared for the sole purpose of advising creditors pursuant to the Insolvency Act

1986. The report is private and confidential and may not be relied upon, referred to, reproduced or

quoted from, in whole or in part, by creditors for any purpose other than advising them, or by any other

person for any purpose whatsoever.

The Administrators acts as agents of UKLI Limited and without personal liability.

CONTENTS Page

UKLI Limited (In Administration) Paragraph 49 Report

1 BACKGROUND 2

2 THE CIRCUMSTANCES GIVING RISE TO THE APPLICATION

FOR THE ADMINISTRATION ORDERS

7

3 THE MANNER IN WHICH THE AFFAIRS OF THE BUSINESS

HAVE BEEN MANAGED AND FINANCED AND WILL

CONTINUE TO BE MANAGED AND FINANCED IF THE

PROPOSALS ARE APPROVED

9

4 THE DIRECTORS’ STATEMENT OF AFFAIRS 19

5 THE ADMINISTRATORS’ RECEIPTS AND PAYMENTS

ACCOUNT

21

6 ADMINISTRATORS’ FEES AND EXPENSES 22

7 OTHER INFORMATION TO ASSIST CREDITORS 24

8 STATEMENT OF PROPOSALS PURSUANT TO PARAGRAPH

49 OF SCHEDULE B1 OF THE INSOLVENCY ACT 1986

26

APPENDICES

1. Statutory Information

2. Directors’ Statements of Affairs

3. Administrators’ Receipts and Payments Account and Estimated Outcome

Statement

4. Administrators’ Time Cost Analysis

5. Heading required by Article 42(1) of Council Regulations (EC) no 1346/2000 of

29.5.2000 OJ L p12) (EC Regulation on Insolvency Proceedings 2000

6. Proof of Debt Form – trade creditors only

7. Proxy Voting Form

UKLI Limited (In Administration) Paragraph 49 Report 1

ABBREVIATIONS

For the purpose of this report the following abbreviations shall be used:

“Act” The Insolvency Act 1986 (as amended)

“Administrators” Refers to the Joint Administrators, L A Manning and C M Siddle

“Company”, “UKLI” UKLI Limited (In Administration)

“Cheval” Cheval Property Developments Limited

“CIS” Collective Investment Scheme

“Cluttons” RH & RW Clutton LLP

“Clydesdale” Clydesdale Bank PLC

“CVL” Creditors’ Voluntary Liquidation

“DTZ” DTZ Debenham Tie Leung Limited

“Deloitte” Deloitte & Touche LLP

“FSA” Financial Services Authority

“FSMA” Financial Services and Markets Act 2000

“m” million

“St James” St James Land Limited


1. BACKGROUND

1.1. APPOINTMENT OF ADMINISTRATORS

Lee Antony Manning and Carlton Malcolm Siddle of Deloitte & Touche LLP, PO Box 810, London EC4A 3WA were appointed as Joint Administrators of the Company by the High

Court, London on 22nd April 2008.

The Administrators were appointed over the Company by Clydesdale using the out of court

process, under paragraph 14 of Schedule B1 of the Act.

For the purposes of paragraph 100 of Schedule B1 of the Act, the Administrators confirm that

they are authorised to carry out all functions, duties and powers by any of them, jointly or

severally.

1.2. INTRODUCTION

This report is prepared pursuant to Paragraph 49 of Schedule B1 of the Act. The purpose of

this report is to provide the creditors of the Company with details of the Administrators’

proposals to achieve the purpose of the administration order.

Please note that the majority of the background information has been provided from various

sources within the Company and has not been verified by the Administrators.

To assist the creditors and enable them to decide on whether or not to vote for the adoption of the proposals, the following information is included in this report:

• Background to the Company;

• The circumstances giving rise to the administration;

• The manner in which the business has been and is intended to be managed;

• The Directors’ Statements of Affairs, the Administrators’ comments thereon and the estimated outcome for creditors;

• The Administrators’ Receipts and Payments account for UKLI for the period 22 April 2008 – 9 June 2008;

• Details of Administrators’ costs to 2 June 2008; and

• Other information to assist the creditors.

1.3. COMPANY STRUCTURE AND HISTORY

The Company was incorporated and commenced trading on 5 February 2003.

In August 2005, the Company acquired Redscreen Limited, which operated a call centre

facility, based in Glasgow. Redscreen Limited’s name was subsequently changed to Chorus

Direct Limited in September 2005.


The sole shareholder of the Company is Baljinder (“Bally”) Chohan. There are a number of

other entities controlled by Mr Chohan that share similar names to UKLI Limited and which

operate in a number of other countries. However, these companies do not have a common corporate parent, as is shown below. There are a number of transactions between the

Company and other entities controlled by Mr Chohan that are outlined in more detail in

Section 3.7.

In relation to several of the overseas entities, the Administrators are still carrying out

enquiries into the exact ownership structure although it is understood that these entities are all

ultimately controlled by Mr Chohan. All of the UK entities are controlled by Mr Chohan.

1.4. OVERVIEW OF BUSINESS

The Company’s principal business activity was that of a landbanking company involved in the

marketing and sale of undeveloped land to private investors, primarily based within the UK.

The Company’s head office was based in Berkeley Square, Mayfair, London and call centre

staff were based at the Glasgow office of Chorus Direct Limited. The finance function of the

Company operated from Hitchin, Hertfordshire. The Company also operated satellite offices

at various locations around the country including St Albans, Birmingham and from Greek Street in central London.

The Company marketed its product on both television, radio and newspaper media, on the

internet and at various property trade/investment fairs. The Company had a sales force of between 60 to 80 agents.

The Company sold c.5,000 plots on a total of 17 sites. A full list of the development sites sold

by the Company are set out in section 3.6.

UK Land International (M) Sdn Bhd

(Malaysia)

European Property Ventures

Ltd

(Gibraltar)

Chorus Direct Limited

UKHCG

St James's Capital Investments

(Pty) Ltd

(South Africa)

Chorus Direct International FZ-LLC

(Dubai)

International Companies

Regents Land Ltd

UKLI Real Estate Pvt Ltd

(India)

Baljinder Chohan - Shareholder (100%)

Conduit Business Information

Limited

UK Land Investments International

Ltd (formerly SBPI Ltd)

(BVI)

Sigma Consultancy Services

Limited

St James's Land Ltd UKLI Ltd


1.5. MANAGEMENT AND EMPLOYEES

As at the date of the Administrators’ appointment, the key management of the Company consisted of:

• Baljinder Chohan – Managing Director (sole Statutory Director)

• Robin Barton – Head of Legal / Operations

• David Gelb – Head of Sales

• Sara O’Neill – Head of Finance

• Patrick O’Reilly – Company Secretary

• Saminder Watts – Human Resources

• Lukhbir Baines – Sales (was a Statutory Director of UKLI for the period 1 December 2006 to 27 February 2008)

• Sudhir Khundi – Sales (was a Statutory Director of UKLI for the period 26 April 2006 to 27 February 2008)

The Administrators have requested from Robin Barton, on several occasions, a confirmation of the roles and responsibilities of each member of the management team. This has to date not

yet been provided.

Further details on the Company are included in the summary statutory information in

Appendix 1.


Mgt accounts

1/09/07 to

Mgt accounts

year end

Audited year end

(18 months)

£'000 22/04/2008 31/08/2007 31/08/2006

Fixed assets

Intangible assets 18 32 53

Tangible assets 264 461 614

Current assets

Stock 11,162 13,563 15,547

Debtors 9,378 8,187 10,150

Cash in Hand 598 635 297

Total Assets 21,421 22,878 26,662

Liabilities (15,990) (18,277) (22,441)

Net Assets / (Liabilities) 5,431 4,601 4,221

Mgt accounts

1/09/07 to

Mgt accounts

year end

Audited year end

(18 months)

£'000 22/04/2008 31/08/2007 31/08/2006

Turnover 7,709 13,375 23,961

Gross profit 2,936 7,384 13,720

Operating profit / (loss) 227 1,588 3,789

Interest receivable on connected

party loans1,321 - -

Profit on ordinary activities

before tax 826 376 2,733

Net proft / (loss) after tax 826 376 2,225

1.6. OVERVIEW OF FINANCIAL INFORMATION

The following financial results and balance sheet summaries below have been extracted from

the following sources:

• Un-audited management accounts for the period 1 September 2007 to 22 April 2008;

• Un-audited management accounts for the year ending 31 August 2007; and

• Audited accounts for the eighteen months ending 31 August 2006.

During 2006, the Company entered into a series of loan agreements in order to fund other

entities controlled by Mr Chohan. The Administrators have the documents setting out the terms of these loans.

The Company erroneously did not record interest due on these loans in the management

accounts for the year ended 31 August 2007. However, the amount recorded in the management accounts to 22 April 2008, includes an adjustment to reflect this missing interest.

To date, the Company has not received any interest payments from any of these connected

entities. Please see section 3.7 for further detail.

The balance sheets of the Company are summarised below:


The Company’s principal assets at 22 April 2008, are as follows:

• Stock comprising £5.7m of freehold properties and £5.5m of land.

• The majority of debtors relate to connected party loan accounts for sums advanced or amounts due on land transferred to entities owned or controlled by Bally Chohan (but

not paid for).

• Liabilities principally relate to £3.5m in relation to the Borehamwood development whereby certain customers would be entitled to a refund of their investment plus

interest if planning permission was not gained by 2008. We understand that there is no immediate prospect of planning consent on this site at this time. In addition £3.8m

relates to secured bank loans granted by Clydesdale (£3.3m) and Cheval (£0.5m). A

further £5.9m relates to an accounting provision for future planning costs. This provision was created in 2005 following concerns made by Moore Stephens, the

Company's previous auditors.

• It should be noted that the above balance sheet does not include a substantial contingent liability that may arise if the Company is judged in court to have been

operating a CIS. In this event, existing plotholders, who exercise their right to give

back their land in return for a refund under section 26 of the FSMA, will become

unsecured creditors of the Company for the price paid for the land plus an element of compensation.

• There are also a further £8.6m of plot sales carried out under an agency agreement on behalf of a related company, Regents Land Limited, which may also fall to be treated

as an unsecured claim against the Company under section 26 of the FSMA. This

issue is discussed further in section 3.6 and will again be subject to Court

determination.


2. THE CIRCUMSTANCES GIVING RISE TO THE APPLICATION FOR THE ADMINISTRATION ORDERS

2.1. EVENTS PRIOR TO ADMINISTRATION

Clydesdale Bank Charge

The Company (by resolution of its directors) entered into a Debenture with Clydesdale on

12 April 2006. In respect of this loan agreement, legal charges were also entered into by the

Company in favour of Clydesdale, between 20 April 2006 and 15 May 2006 over seven land and property titles lodged at the Land Registry.

Efforts to seek repayment by Clydesdale were made several months prior to the

Administrators’ appointment. The Company then made several proposals as to repayment, but payment kept being delayed. As repayment was not forthcoming, and formal demand for

repayment had been made, an executed notice of appointment of Administrators was lodged at

court by Clydesdale on 22 April 2008. It was also at about this time that Clydesdale became

aware of the winding up petition against UKLI that had been issued by the FSA.

FSA Investigations

The Company’s business model in the period 5 February 2003 until 15 March 2006 was to acquire primarily undeveloped farm land that it claimed had development potential, much of which was on the fringes of Greater London. This land was then sub-divided into smaller

plots and these plots were then sold to members of the public, primarily based in the UK.

The idea was that the Company would then seek planning permission on the sites concerned. Plotholders would then benefit from the planning gain achieved on any onwards sale of their

plot(s) to a developer.

The Company has been subject to an investigation by the FSA since 2006.

The FSA deemed that UKLI under the above business model was operating as a CIS. The establishment and operation of a CIS is a regulated activity under FSMA and it is necessary

for any person who wishes to carry on such activity to be authorised by the FSA.

A CIS is defined as any arrangement where property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements to receive

profits or income arising from the acquisition, holding, management or disposal of property or

sums paid out of such profits or income.

In view of the FSA action, the Company proposed alterations to its business model to avoid

operating as a CIS. Under this new model, UKLI retained a proportion of the land on each

site and sought to procure re-zoning of only its retained land, rather than for the whole site.

However, the assertion by the FSA was that in practice plots were still marketed to individuals under the same basis, in that the Company would continue to seek planning permission for the

entire site, and considered that the Company was therefore still operating illegally as a CIS.

Consequently, the FSA considered it necessary to present a winding up petition to the High Court to stop the Company trading, in accordance with its regulatory objectives, believing this

to be in the public interest.

The petition was presented by the FSA on 1 April 2008 on the grounds that the Company

should be wound up under Section 367 of FSMA as the Company was unable to pay its debts and that it was “just and equitable” that it should be wound up as a matter of public interest.

A freezing order prohibiting any further plot sales was put in place on the 3 April 2008. The

Court hearing of the petition was originally scheduled for the 26 May 2008. However, the FSA subsequently agreed that the petition to wind up the Company be adjourned on the basis

that Administrators had been appointed to take control of the Company’s affairs and that the


Administrators propose to place the Company into a Creditors Voluntary Liquidation at the

appropriate time.

2.2. PURPOSE OF THE ADMINISTRATION

From 15 September 2003 the Enterprise Act 2002 replaced the previous four purposes of

administration with one overarching purpose, split into a 3 part single purpose:

i. Firstly, to rescue a company as a going concern (in other words a restructuring which keeps the entity intact).

ii. Secondly, if the first purpose is not reasonably practicable (or the second purpose would clearly be better for the creditors as a whole), then the administrator must

perform his functions with the objective of achieving a better result for creditors than would be obtained through an immediate liquidation of the company. This would

normally be by a sale of the business and assets as a going concern. iii. Thirdly, if neither of the first 2 parts of the purpose are reasonably practicable, the

administrator must perform his functions with the objective of realising property in order to make a distribution to secured and/or preferential creditors.

Given that the business activities of the Company were not authorised by the FSA and that a

freezing order has been granted prohibiting any further sales of plots, the Administrators were unable to rescue the Company or to undertake a sale of the business and assets as a going

concern. The first and second purposes of an Administration were therefore not possible to

achieve.

The Administrators will therefore seek to achieve the third purpose, to realise the Company’s

property in order to make a distribution to secured and/or preferential creditors. Any surplus

funds will be made available to distribute to unsecured creditors.

However, in view of the number of concerns over the operations of the Company, we believe that this will be best served by placing the Company immediately into a Creditors’ Voluntary

Liquidation.

As outlined above the placing of the Company into CVL has been discussed with the FSA who are in agreement with the proposed strategy as it will provide a number of advantages:

• Additional investigatory and recovery actions are available to a Liquidator. A Liquidator is also more easily recognised by the courts in other jurisdictions.

• The CVL will enable the FSA to have met its regulatory objectives without the need for a compulsory (court) liquidation, which would significantly increase the costs to

be borne by the Company’s estate and therefore reduce the potential dividend

payable.


3. THE MANNER IN WHICH THE AFFAIRS OF THE BUSINESS HAVE BEEN

MANAGED AND FINANCED AND WILL CONTINUE TO BE MANAGED

AND FINANCED IF THE PROPOSALS ARE APPROVED

3.1 INTRODUCTION

The following sections cover the actions taken by the Administrators since their appointment in relation to the identification and realisation of the Company’s assets.

3.2 IMMEDIATE ACTIONS

Immediately following appointment, the following actions were undertaken:

• Administrators’ staff attended the Company’s offices at Berkeley Square and Greek

Street in London to notify and advise employees of the administrators’ appointment.

The Administrators’ staff also attended the Glasgow and Hitchin offices of the Company.

• Meetings were held with senior management to identify key assets;

• A chattel agent was engaged to list and value all non-property assets of the Company;

• Discussions were held with Company management to compile an up to date schedule

of land and buildings held, including details of all sales transactions that were in

progress at the time of appointment (or had yet to be formally completed);

• The Administrators contacted the Company’s current and other potential property agents to review and submit marketing proposals for the disposal of the portfolio of

land and property held by the Company;

• Current title plans were ordered from land registry to confirm ownership of each site;

• Open cover insurance was arranged for the assets of the Company;

• The Berkeley Square office was closed on 30 April 2008 and the Company’s files

were transferred to the Company’s Accounts office in Hitchin;

• The Greek Street office was closed on 24 April 2008 and returned to the Landlord;

• A full list of creditors and debtors was collated and letters of appointment ere sent out

to approximately 5,000 plot holders and approximately 1,000 potential trade creditors;

• Steps were taken to secure the Company’s records (both paper and electronic);

• All historical customers, who had purchased land, were notified by post and

information relating to the appointment was also placed on the Company website;

• Various statutory requirements and notices were also complied with;

• In view of the freezing order imposed on UKLI on 3 April 2008, the

Administrators ensured that all ongoing sales of plots were halted whilst legal

advice was sought on the impact of this order upon the conduct of the

Administration; and

• Steps were taken to register the Company for VAT.


3.3 COMPANY PREMISES

With the exception of the finance office at Hitchin, all other sites have now been vacated and returned to their respective landlords. The Hitchin office has been retained for a short period,

whilst the financial records are reviewed, at a monthly rate of £1,940.

The Company’s former office in Berkeley Square was vacated on 30 April 2008. The balance

of the rent deposit held by the Landlord (after the deduction of agreed dilapidations and outstanding rent and other charges) of c£22,000 will shortly be refunded to the

Administrators.

3.4 MANAGEMENT AND EMPLOYEES

As at the date of appointment, all staff had been paid in advance for the period to 30 April

2008. Shortly following the appointment of Administrators, it was decided to make all staff,

with the exceptions noted below, redundant. Redundancy was effective from 25 April 2008.

The administrators retained the services of Robin Barton (legal / operations), David Gelb (sales) and Saminder Watts (HR) to aid enquiries.

In addition, two members of the accounting staff were retained for a period of four weeks to help collate and update the Company’s records.

No staff remain employed by the Company. However, arrangements have been put in place for the ad-hoc use of the company’s former accounts staff.

3.5 INVESTIGATIONS TO DATE

The Administrators took the following actions in relation to the forensic preservation of UKLI electronic data and in relation to the analysis of various UKLI databases.

Forensic Preservation

The Administrators have worked closely with the Company’s IT staff to identify the relevant data sources and to collect the data in a forensically sound manner (suitable for use in Court).

UKLI data was stored on servers in the following locations:

• UKLI Hitchin office;

• UKLI Glasgow office;

• within their hosted server provider's facilities in Brick Lane, London; and

• with their hosted email provider Intermedia.Net. UKLI data from these servers has been extracted and in the case of the Hitchin and Brick

Lane server sets, a secondary alternative set of data was taken for redundancy. The collected

data is being copied to the Administrators’ secure servers for preservation and preparation for further analysis or investigation. The size of this data set amounts is over two terabytes.

In addition to the above, any available archive backup tapes were collected and secured for

preservation purposes.

Customer Address Analysis

The Company did not maintain a centralised source of customer information. Historical

customer information had to be collated from a combination of the following sources:

• Sales Lists

• Sales Master

• GSA (an internal bespoke SQL Server database)

• Microsoft CRM (Customer Relationship Management)


A data cleansing process was undertaken as plot and address information was not held

consistently across each of the data sets.

The analysis involved manipulation of databases and Excel spreadsheets with additional manual processing. This resulted in the identification of which customer and address

information related to each plot.

Additionally, postcodes were extracted from the Administrators’ final customer address list

and a geographic analysis was completed by area, county and country. This analysis indicated that the over half of UKLI’s customers, who purchased land, were based in and

around the Greater London area.

The result of this exercise has enabled the Administrators to be able to contact c.5,000 plotholders of the Company.

3.6 REALISATION OF ASSETS

The table below sets out a breakdown of the assets held on appointment together with an estimate of their realisable value.

Realised To

Date

Estimated Future

Realisation Values

Total

£ £ £

Tangible assets:

IT Equipment (owned) 15,000 - 15,000

Fixtures and Fittings incl above incl above incl above

Motor Vehicles (owned) 4,085 315 4,400

Motor Vehicles (leased) tbc 14,190 14,190

Sundry Items & Interest 27,066 32,000 59,066

46,151 46,505 92,656

Stock:

Land Stock - - -

Property Stock 1,875,000.00 4,491,000 6,366,000

1,875,000.00 4,491,000 6,366,000

Debtors:

IT Equipment (leased) - - -

Loans - 500,000 500,000

Cash: 599,120 - 599,120

Total 2,520,271 5,037,505 7,557,776


IT equipment and Fixtures and Fittings

IT equipment includes items such as projectors, video display units, desktop computers, laptops and telephone equipment. The majority of the Company’s equipment was held under

lease.

Fixtures and fittings include items of office furniture such as desks, chairs, coffee tables, sofas

and a wall of plasma televisions.

The appointed chattel agents, Go Industry, were instructed to value the Company’s owned

equipment and placed an open market value of £9,000 on these assets.

Some of the owned and leased IT equipment had actually been transferred overseas to various other companies controlled by Mr Chohan and the Company did not appear to have a

comprehensive audit trail to confirm the actual assets transferred nor their location.

The Administrators therefore agreed to accept an offer of £15,000 from St James’s Land Ltd, a related Company, in respect of these assets.

Given the complication and costs involved in tracing and recovering the overseas items of

equipment and the low open market valuation, this was considered to be in the best interests

of UKLI’s creditors.

IT equipment (leased)

IT equipment, leased in 2006 by the Company, was transferred in 2006 to UK Land International (M) Sdn Bhd, an entity controlled by Mr Chohan, with the lease payments

recorded under a loan to the Malaysian company.

Motor Vehicles

Go Industry were also instructed to deal with the eight leased vehicles held by the Company.

After comparing final lease settlement figures to current valuations it was concluded that, with

the exception of two vehicles, no equity would be released through the purchase and

subsequent sale of the vehicles.

Consequently, the finance companies were instructed to collect six vehicles and the remaining

two vehicles were sold for a net return of £14,190 after payment of the lease costs.

The Company also had four owned vehicles, two of which have been sold for £4,400. Of the remaining two vehicles held, an expression of interest has been registered on one vehicle and

negotiations are currently ongoing. The other remaining vehicle is held by Mr Chohan but

despite several requests Mr Chohan has failed to deliver up the vehicle’s keys so that this can

be collected, although we do not believe it had a significant value. This matter is currently being pursued.

Property Stock

As well as buying land for onwards sale as plots, the Company also purchased a number of properties, typically farm houses and adjoining farm buildings.


The table below sets out a breakdown of the property stock held by the Company at the date

of appointment together with an estimate of their realisable values (pre sales and legal costs).

The above property assets are either charged to Clydesdale or Cheval. The Administrators are still investigating any potential equity in St George Wharf.

Property realisations to date

The Joint Administrators have continued with the sale of two properties held by the Company,

known as Finnamore Wood and Kendall Hall Farm, that had received offers pre appointment for £1,250,000 and post appointment of £625,000 respectively.

The offer prices were consistent with valuations provided by Savills, a property agent, and are

from unconnected parties.

The proceeds of these transactions will go to reduce the secured loan of Clydesdale.

Future property realisations

Several property agents were approached and asked to demonstrate their ability to deal with a

large and potentially complex portfolio of both property and land of varying type and condition, spread throughout England. DTZ, Savills and Clutton’s (who managed the

Company’s property portfolio) submitted tenders for this appointment.

As a result of the tender, DTZ have recently been appointed to manage the process of realising these assets for the benefit of creditors and will work closely with Clutton’s, who continue to

act as managing agent in respect of the Company’s properties.

DTZ will market the property portfolio in such a manner as to maximise recoveries. The process will be closely managed by the administrators’ staff with experience in this sector.

The proceeds of the property sales will in the first instance be applied to discharging the

indebtedness due to the secured creditors, Clydesdale and Cheval, with any residual flowing

to the general administration account, which will in due course become funds available to unsecured creditors.

Estimated

Realisable

Value

Properties: £

Kendall Hall Farm 625,000

Lodge Farm 1,017,000

Westfield Farm 270,000

Layhams Farm 1,462,500

Masons Farm 472,500

Finnamore Wood 1,250,000

Stoke Heath Camp 387,000

St George Wharf (flat) uncertain

Little Westcot 450,000

Alexandra Dock 432,000

6,366,000


Appendix One: Deloitte land site analysis

Source: Hitchin finance office, Ankit Shah

Site (location) Acreage gross Acreage

plotted

Acreage

transferred*

Acreage

retained

Land

owner

Grade Planning commentary

Severnbeach 13.8 11.3 2.5 Regents

Land Ltd

1A - Good prospect

Earl Shilton 2 6.8 4.6 2.2 Regents

Land Ltd

1A - Good prospect

Finchampstead 25.9 18.9 7.0 Regents

Land Ltd

1B - Good potential with time

Borehamwood 107.0 63.3 23.3 20.4 UKLI

UKLII

1B - Issues include flooding, ground stability

- Non statutory wildlife site

- Greenbelt site

- Good potential with time

Rearsby 5.5 4.7 0.8 Regents

Land Ltd

B - Limited prospect

Cambridge 57.0 44.6 12.4 UKLI B - Site positioned on less favourable side of the A1

- Potential to build hotel / leisure site

- Greenbelt site

- Limited prospect

Godalming 23.8 18.8 5.0 UKLI B - UKLI demolished barn on site which decreased value

- Located close to A3 so possible potential to build hotel or park and

ride

- Greenbelt site

- Limited prospectIver Gardens 15.0 12.5 2.5 UKLI B - Adjoins a residential development

- Pressure in area due to expansion of Heathrow

- Greenbelt site

- Limited prospect

Billericay 53.5 23.8 29.7 UKLI C - Chelmsford Local Authority has no shortage of land issues

- Isloated site, has no real value

- Greenbelt site

- Minimal prospect

Chesham (Pednor Road,

Chesham)

40.6 33.4 7.2 UKLI C - Area of outstanding natural beauty

- Access very poor

- Minimal prospect

Lingfield 114.3 61.1 15.9 37.3 UKLI

St James

Land Ltd

C - Was previously considered as a 'green' burial site

- No access

- Greenbelt site

- Minimal prospect

New Addington 285.9 63.0 148.0 74.9 UKLI

UKLII

EPV

C - Majority of land plots lie within a valley

- Currently being marketed as 'Canary City' by UKLII

- Road needs to be significantly widened

- Currently being used to hold open air motor shows

- Minimal prospect

Paddock Wood 190.6 86.4 63.1 41.1 UKLI

UKLII

St James

Land Ltd

C - At Northern end there is a primary and industrial site

- On a flood plain

- Maidstone Borough Council have no land shortages

- Open countryside location

- Minimal prospect

Slough 27.8 20.4 7.4 UKLI C - Mostly flood plain

- Greenbelt site

- Minimum prospect

Windsor, Little Westcott 12.2 9.1 3.1 UKLI C - Site has a very poor location and access issues

- Minimal prospect

Brede & Gotham Lane 120.35 101.75 18.6 UKLI C - Two sites, one of which is woodland

- Minimal prospect

Kendall Hall Farm

(Radlett)

101.3 27.1 30.0 44.2 UKLI not

available

- Private prep school and primary school both submitted interest in

acquiring land.

- Prep school purchased 10 acres

- However, primary school lost interest as did not wish to have to

purchase existing barn located on site

- No certificate of lawfulness on existing barn

- Greenbelt site

Land Stock

In total, 17 land sites have been acquired, marketed and sold by UKLI since 2003. The

Company still maintains substantial elements of land at a number of these sites.

The table below, formulated following discussions with Company’s former planning

consultant and with Clutton’s, sets out a summary of each of these sites, including the

approximate acreage retained by the Company:


Site (location) Acreage gross Acreage

plotted

Acreage

transferred*

Acreage

retained

Land

owner

Grade Planning commentary

Grimsby

(Alexander Dock)

5.9 5.9 UKLI 1A - Health and Safety issue at site due to hazardous storage

- Once H&S issue resolved, planning is in progress for 117 appartments

- Good prospect

Stoke Camp 12.7 12.7 UKLI B - 70 buildings on site

- Local Authority maintain there is no use for the site

- Limited prospect

Northolt 0.2 0.2 UKLI not

available

- Small area of land, considered garden land

The rating system in the table on page 14 ranges from 1A to C, with 1A being the sites with

the highest potential to secure successful planning permission within the short to medium

term. As is illustrated, a number of sites marketed by the Company appear to have significant obstacles that would prevent planning permission being granted.

A number of sites purchased by UKLI also had elements of their land subsequently transferred

to other entities controlled by Mr Chohan. These transfers were recorded as loans of which no

cash consideration has been paid to date. The values of these loans total approximately £1.4m. Most of this land was transferred to UKLII Limited which we understand continues to

sell these plots in a similar manner to UKLI from overseas. The circumstances surrounding

these transfers and the value ascribed to these transfers are in the process of being investigated. See section 3.7 for further details.

Four of the above sites were also sold by UKLI under an agency agreement on behalf of

Regents Land Limited, a company owned by Mr Chohan. The Administrators are currently in

negotiations with the FSA and their legal advisors over the treatment of plot holders on these four sites.

In addition, the following three sites were purchased by the Company but had yet to be

marketed.

DTZ will also be providing strategic assistance on how best to deal with the land stock held.

Further information on each of the sites will be available on the website

www.uklandinvestments.com in due course.


3.7 LOAN BALANCES

A total of £9.4m was owed to the Company at the 22 April 2008 in relation to several loans

that had been made to other legal entities controlled or owned by Mr Chohan.

Loans to UK entities

The table below sets out a summary of the loans made to UK entities, all of which are

controlled by Mr Chohan, alongside a brief commentary describing the key rationale for the

loan.

UK entities that have

received loans

Key

business

activity

Loan balance

at 22/4/08

(£)

Key rationale for loan

Sigma Consultancy

Limited

Holding

company

359,400 • Funds transferred to finance investment in Conduit Business

Information Ltd.

Conduit Business

Information Limited

Business

information

services

694,881 • Funds transferred to pay for operational expenses in Conduit

Business Information Ltd.

UK Health Care Group Care homes 1,451,026 • Funds transferred to purchase two care homes, of which one has subsequently

been sold and repaid.

• In addition, a central health care acquisition team was funded using

funds from UKLI.

Chorus Direct Limited Call centre 2,338,716 • Funds transferred to finance operational costs in Chorus Direct Ltd.

LDCG Limited Care homes 558,592 • Loan to LDCG Ltd to finance the purchase of a care home.

Total loans to UK

entities

5,402,615

Funds appear to have been lent to the above companies on non commercial terms with no

clear financial benefit to UKLI. The Administrators are currently in the process of

investigating the above loan balances. Letters before action have been sent out requesting repayment of these loans.

In the case of Conduit Business Information Limited, the Administrators have been

approached by Robin Barton (its Director) with a view to negotiating a settlement figure.

There is unlikely to be any return from the loan given to Sigma Consultancy Limited as it is a shell holding company, although it should have a debt due to it from Conduit.

In relation to Chorus Direct Limited, we understand from Robin Barton (its Director) that he

is shortly to place this company into CVL and that it is highly unlikely that any return will be made to its unsecured creditors.

In relation to UK Health Care, the Administrators are currently in negotiation with Sara

O’Neill and Robin Barton (its Directors) in order to maximise potential recoveries from this

loan as there is equity within this company over and above the mortgages over its two care homes.


No other substantive responses have been received and it is likely that the recovery, or partial

recovery, of these debts will require the sale or liquidation of some or all of the above entities.

In addition, Mr Chohan had a personal loan account amounting to £73,847 with the Company, which is in contravention of the Companies Act 1985. This amount has been requested to be

repaid and remains outstanding. A letter before action has also been sent in respect of this

balance.

Loans to overseas entities

The table below sets out a summary of the loans made to overseas entities which are owned or controlled by Mr Chohan. Investigations are currently underway to ascertain the corporate

ownership structure of these entities.

Overseas entities that

have received loans

Key

business

activity

Loan balance

at 22/4/08

(£)

Key rationale for loan

UKLII Sale of land

to general

public based

overseas

1,989,931 • Land transferred from UKLII was

recorded as a loan.

• In addition, a loan of £650,000 was

taken out by UKLI and paid directly

into UKLII, for which UKLI remains

liable.

Chorus Direct

International

International

marketing

and sales HQ

1,494,886 • Funds transferred to finance set up

costs and operations for an

international sales HQ to support

UKLII, European Property Ventures

and other overseas entities.

UK Land Intl (M) SDN

BHD

Sales agency 275,772 • Transfer of IT equipment that was

leased and paid for by UKLI.

European Property

Ventures Limited

Overseas

land sales

agency

188,991 • Land transferred from UKLI was

recorded as a loan.

St James Capital

Investments (Pty)

Limited

Overseas

land sales

agency

60,918 • Funds transferred to finance set up

costs.

Total loans to overseas

entities

4,010,498

In addition, a loan of £240,000 was made to a Mr S Khinda in March 2005. Mr Khinda

claims that this loan was used to finance set up costs of another overseas entity, UKLI Real

Estates Pvt Limited, based in India. However, this loan was paid into his personal bank account and to date Mr Khinda has been unable to substantiate his assertion. We intend to

pursue him personally for recovery, in this regard.

Funds lent to the above companies also appear to be on non commercial terms with no clear

financial benefit to the Company. The Administrators are currently in the process of investigating all of the above loan balances.


In addition, in view of the freezing order enforced on the Company on the 3 April 2008, we

understand that the Company’s sales staff started to sell off plan property in Dubai on behalf

of another one of Mr Chohan’s overseas companies, under a commission based arrangement.

We are currently investigating the amount due to the Company in relation to this matter as no

amounts had been invoiced to the Company at the date of the Administrators’ appointment,

despite UKLI having paid the wages and the related costs for these operations.

Letters before action have all been sent, however, to date we have received no substantive responses. These loan agreements are governed by UK law and accordingly a judgment will

need to be obtained in a UK court and then enforced in the relevant foreign jurisdiction. The

estimated costs of enforcing judgments in foreign jurisdictions will vary depending on the relevant country, although we have obtained estimates from foreign lawyers for the relevant

jurisdictions. These will be issues that we will wish to discuss with any duly appointed

Creditors Committee.

Whilst we are at an early stage of pursuing the recovery of these related party debts, we are conscious of the fact that creditors will need to be consulted about the lengths they would

wish the Administrator / Liquidator to go into in order to recover some or all of these debts.

This will be a key area of focus with the Creditors Committee.

It should be noted that pursuing debt through litigation is often an expensive process,

particularly against overseas entities and the Administrators will not enter into any action

without seriously balancing costs against the potential benefits.

3.8 CASH AT BANK

The Administrators continue to investigate the circumstances in which the Company set up

and operated an account with Barclays Bank plc known as the UKLI client account (“Client

Account”). The Client Account was opened in September 2006 and at the time of our appointment there was a credit balance on the account of approximately £411,000.

The Administrators are seeking legal advice as to whether monies held in the client account

formed part of the assets of the Company or whether they were, for example, held by the Company on trust for certain individuals from whom payments were received by the

Company in respect of transactions for the purchase of land which did not complete.

Witness statements have been prepared following meetings with former members of the Company's staff whom it is understood were responsible for setting up and processing

transactions through the Client Account. One of the key complexities is that there is no clear

trail as to the original source of the funds moving in and out of the account.

The Administrators are taking steps to resolve this issue as quickly as possible but creditors should be aware that directions from the court are likely to be required. The Administrators

will provide an update to creditors at the creditors meeting.

3.9 TRADING

Given that the business activities of the Company were not authorised by the FSA, no plot

sales have been executed during the Administration.


4 DIRECTORS’ STATEMENT OF AFFAIRS AND ESTIMATED OUTCOME FOR

UNSECURED CREDITORS

4.1 INTRODUCTION

A statement of affairs was prepared by the Company’s accountant, for signing by Mr Chohan,

the Director and is attached at appendix 2. Our comments on this statement are set out at

paragraph 4.4.

Despite several requests from the Administrators, this statement is yet to be signed by Mr Chohan or alternatively an explanation offered as to why he is refusing to sign. It is a

statutory requirement for the directors to complete a Statement of Affairs.

4.2 SECURITY

Clydesdale holds fixed and floating charges over the assets of the Company in the form of a

mortgage debenture. The outstanding debt was £3.3m at the date of appointment of

Administrators. This charge was registered on 12 April 2006. The fixed charge covers seven

properties and the estimated realisable value of these properties currently exceeds the current debt by approximately £2.2m.

Clydesdale will receive the net proceeds on the realisation of assets charged to them, in

priority to all other creditors, other than Cheval where Cheval has priority over Clydesdale on three properties.

A separate fixed charge was granted to Cheval, over three properties, in conjunction with a

bridging loan agreement. The outstanding debt was £0.5m at the date of appointment and, on the realisation of these assets, the net proceeds will be paid to settle this debt.

The charge was registered on 19 October 2006. The estimated realisable value of these

properties currently exceeds the outstanding debt by approximately £0.4m.

The Administrators’ solicitors Messrs Addleshaw Goddard LLP have verified the validity of the charges and Debenture on behalf of the Administrators.

4.3 PRESCRIBED PART

The Prescribed Part (Section 176A and the Insolvency Act 1986 (Prescribed Part) Order

2003) applies where there are floating charge realisations, net of costs, to be set aside for

unsecured creditors in priority to secured creditors when security was granted post 15 September 2003. This equates to:

• 50% of net property up to £10,000

• 20% of net property in excess of £10,000

• Subject to a maximum of amount of £600,000

Given that the estimated realisable value of the properties held under fixed charges exceeds

the outstanding debts, it is unlikely that the prescribed part provisions will apply as there will

not be any floating charge distribution. The effect of this is that after all employee preferential claims have been satisfied in full and Clydesdale and Cheval have been paid,

monies will be available to distribute to unsecured creditors.


4.4 ADMINISTRATORS’ COMMENTS ON THE DIRECTORS’ STATEMENT OF

AFFAIRS

The Administrators make the following comments on the Directors’ Statement of Affairs:

• The Administrators have yet to review in detail the values of all property assets reflected in the Statement of Affairs.

• The amounts due to secured lenders have been included by the Directors at the value shown in the Company’s books and records at the date of appointment of

Administrators.

• Properties were shown at cost on the balance sheet and this cost value has been reflected in the Directors’ Statement of Affairs. The estimated realisable value of these properties is expected to be slightly higher, in accordance with an independent

valuation exercise carried out by our property agents.

• No professional valuation of land stock held has been undertaken.

• This statement does not include the costs of realisation or other costs in respect of the Administration.

• The statement has not been signed by Mr Chohan.

4.5 ESTIMATED OUTCOME FOR THE UNSECURED CREDITORS

At this stage of the Administration, the complexities of this case mean that the Administrators are not in a position to give a realistic indicative outcome to the creditors as to their dividend

prospects.

The potential dividend payable to unsecured creditors is highly uncertain as the potential level

of unsecured claims could range from £5m to £73m, depending on whether Section 26 of FSMA applies. If Section 26 of FSMA is confirmed by the Court to apply, the level of

unsecured creditors will increase significantly as all plot holders will have the right to return

their land to the Company and lodge a claim for their purchase price.

However, we provide, as an indication, the estimated dividend to all unsecured creditors under

three different scenarios in the table below.

Scenario Provisional

Estimated Dividend

(Pence in £ on claim)

1. S26 applies, and all plotholders return their land to the Company 2.5p

2. S26 applies, and 50% of plotholders return their land to the

Company (based on affirmative plotholder questionnaire responses)

5p

3. No plot holders return their land to the Company and therefore do

not become creditors but Borehamwood plotholders claim refund

30 – 40p


5. RECEIPTS AND PAYMENTS ACCOUNT

A receipt and payments account for the Company to 9 June 2008 is attached at Appendix

Three. Most items are either self explanatory, have been covered previously, or relate to day to day expenses of administrating this case by the use of third party suppliers. An explanation

of significant items is given below.

Receipts

Asset lease income relates specifically to IT equipment leased from Barclays which was transferred from the Company’s offices in Berkeley Square to St James’ Land pending a sale

of the equipment from Barclays to St James’ Land. The corresponding lease receipts of

£13,938 paid to UKLI will be paid to Barclays under this arrangement.

Realisations totalling £15,000 from St.James’ Land have been received in respect of the sale

of the Company’s IT equipment and fixtures and fittings, as detailed previously.

Cash at bank totalling £599,120 was transferred at appointment from the Company’s bank

accounts with Barclays.

The property management float received represents funds held on account by the Company’s

former managing agents, Cluttons, for the purpose of the day to day management of the land

stock and property of UKLI. A reduced float of £2,500 remains with Cluttons, who continue to manage the Company’s portfolio on the Administrators behalf.

Property realisations represent proceeds from the sale of Finnamore Wood and Kendall Hall

Barn.

Expenses

Payments made in respect of wages relate to the two members of accounts staff retained to

assist the Administrators’ in their duties.

IT, telephony costs, postage and redirection costs were incurred in order to ensure continuity of IT services to enable the Administrators team to recover the Company’s electronic data,

and to provide for a continued access to the website. Mail redirection costs were incurred in

ensuring all correspondence from the Company’s former customers and creditors comes to the attention of the Administrators.

Statutory advertising costs are incurred as the Act prescribes that notice of the Company

moving into administration be advertised in the London Gazette and nationally. In this case the appointment was also announced in The Times newspaper.


6. ADMINISTRATORS FEES AND EXPENSES

6.1 General

The Administrators’ time costs are categorised into the following task headings and sub

categories, in accordance with the Statement of Insolvency Practice 9. A detailed analysis of

the time spent by category is attached at Appendix 4.

• Administration and Planning includes such tasks as case planning and set-up, appointment notification, statutory reporting, compliance, cashiering, accounting and administrative functions. A full list of immediate actions carried out by the

Administrators is set out at section 3.2.

• Investigations include such tasks as reporting on the directors’ conduct, investigating antecedent transactions and any other investigations that may be deemed appropriate.

Investigations are currently underway into the various loans that the Company made

to other entities owned or controlled by Mr Chohan. The Administrators have also met with the Company's previous planning consultant in order to investigate the status

of the land sites.

• Realisation of Assets includes such tasks as identifying and securing assets, sale of business, property and land issues, activities in relation to other fixed assets, stock,

debtors, investments and any related legal issues. A detailed breakdown of realised

assets is set out at section 3.6.

• Creditors include such tasks as creditor set up, communication and meetings, reviewing and agreeing secured, preferential and unsecured claims, retention of title issues and progressing employee related claims, dealing with correspondence and

telephone calls and emails. To date, the Administrators have sent out correspondence

to c.5,000 plotholders and c.1,000 trade creditors, and dealt with several hundred

telephone calls and emails.

• Other tasks include pension related matters, VAT and corporation tax issues. The Administrators are also in the process of obtaining VAT registration for the Company and investigating the potential tax implications of any Section 26 FSMA claims

against UKLI.

The Administrators will seek approval of the basis of their remuneration and expenses at the

meeting of creditors to be held on 24 June 2008. A guide to Administrations, and

Administrators’ fees, is available at the following address: http://tinyurl.com/3juyjs.

The range of charge out rates for the separate categories of staff (i.e. Partner, Manager and

Assistants/Support Staff) are based on our normal charge out rates and reflect the different

rates for staff in London and those from regional offices. The ranges are summarised below:

Grade Range £ per hour

Partners and Directors 620 to 760

Managers (including assistant managers) 285 to 375

Assistants / Support staff 140 to 220

However, In view of the complexities of this case and the high amount of public and

regulatory interest, the degree of partner time required to manage this Administration is likely

to be higher than normal. In view of the above, the Joint Administrators propose to discount

the chargeable rate for partner and director time by 35%.


We confirm that Lee Manning’s time as partner leading this engagement will therefore be

charged at £494 per hour. In addition, we propose reducing our hourly charge for other grades

of staff by 10%. The effect of these discounts means that at 2 June 2008, our net time costs

stood at £307,255.

6.2 Administrators’ expenses

The Administrators’ direct expenses incurred in the Administration to 2 June 2008 total

£1,420 and consist of travel and subsistence costs.

A further £1,733 was incurred, for the period to 2 June 2008, in relation to courier and

insurance costs.

6.3 Other Professional Costs

To advise on appropriate legal matters the Administrators have instructed Messrs Addleshaw

Goddard LLP, a firm of lawyers with the appropriate expertise and experience in dealing with

administrations. Their professional fees are based upon their recorded time costs incurred at

their prevailing charge out rates and will be reviewed by the Administrators’ staff before

being approved for payment. Legal fees to date stand at approximately £155,000.

In respect of conveyance of the two properties, the Administrators have instructed Messrs

Seddons, a London firm of property lawyers. Property conveyance fees will amount to

£13,800 + VAT.

DTZ, a firm of valuers, property and land agents have been appointed to provide strategic

advice on all property and land related matters, as well as sales and marketing. We will in due

course negotiate an agency fee, on a percentage realisation basis, for their work.

GO Industry, a firm of chattel agents were instructed by the Administrators to carry out a

valuation of the Company’s IT equipment, fixtures and fittings, motor vehicles and other

chattel assets. GO Industry was chosen in light of their expertise and experience in dealing

with insolvency appointments of this nature. The chattel agent’s fees to date are £8,000 +

VAT.


7. OTHER INFORMATION TO ASSIST CREDITORS

7.1 DIRECTORS’ REPORTING

As part of their statutory duties the Administrators will consider the conduct of the directors

and any person considered a shadow or de facto director, in relation to their management of

the affairs of the Company.

The Administrators are required to submit a confidential report to the DTI on the conduct of

any person that has been a director (or shadow or de facto director) within three years prior to

the date of administration. The Administrators’ report must be submitted to the Department

of Trade and Industry within six months and its content is confidential and cannot be

disclosed to creditors.

As part of their investigations the Administrators will consider, among other matters, the

following:

• Statutory compliance issues

• Misfeasance or breach of duty

• Transactions at an undervalue and preferences

We are particularly interested in any information that plot holders may have regarding the

basis on which the Company marketed the planning potential of the sites/plots sold post

March 2006.

Creditors who wish to draw any matters to the attention of the Administrators should write to

the Administrators at the address on the front of this report.

7.2 Exit Routes from Administration

Under the Enterprise Act 2002, all administrations automatically come to an end after one

year, unless an extension is granted by the Court or with consent of the creditors.

However, at present, the likely exit route for the Administration will be through CVL, as per

the Administrators’ proposals, thereby allowing for the effective distribution of the assets to

unsecured creditors.

Otherwise, the appointment of Administrators ceases on the following:

• an application to Court (in the event of a Court appointment);

• filing a notice in Court and with the Registrar of Companies confirming that the

purpose of administration has been sufficiently achieved; or

• in the event that UKLI has no remaining property of value the Administrator may notify

the Registrar of Companies to that effect at which time the appointment of the Administrator ceases and three months following that date the UKLI is deemed to be

dissolved

The exit route chosen in relation to the Company will largely depend on the circumstances

surrounding the proposals and the approval of the creditors.


The exit provisions contained in Schedule B1 of the Insolvency Act 1986 provide an informal

and cost effective way for the appointments of Administrators to cease and reference is made

to this in the Administrators’ proposals.

7.3 EC REGULATIONS

As stated in the Administrators’ appointment documents the European Council Regulation on

Insolvency Proceedings No 1346/2000 applies and these are the main proceedings as defined

in Article 3(1) of that Regulation.


8. STATEMENT OF PROPOSALS PURSUANT TO PARAGRAPH 49 OF SCHEDULE

B1 OF THE INSOLVENCY ACT 1986

As stated in Section 2.3 of this report the Administrators intend to perform their functions in

relation to the Company with the objective set out in Paragraph 3(1) (c) of Schedule B1 to the

Act, to “perform his functions with the objective of realising property in order to make a

distribution to secured and/or preferential creditors”.

The Administrators believe that in view of the enhanced powers of a Liquidator, this will be best achieved by placing the Company directly into a Creditors Voluntary Liquidation. The

Administrators’ proposals to realise property in order to make a distribution to secured and/or

preferential creditors are therefore as follows:

The Administrators propose:

1. to continue to manage and wind down the affairs and assets of the Company, collect any recoverable outstanding debts from both related and unrelated parties as required, utilising

realisations from assets where appropriate, settle any administration expenses where such expenses are incurred for the purpose of the administration and realise the remaining

assets of the Company;

2. to take steps to place the Company into Creditors Voluntary Liquidation and that the Administrators Lee Antony Manning and Carlton Malcolm Siddle be appointed its Joint

Liquidators. The joint liquidators will be in a position, if desired by the creditors or the

Creditors Committee, if one is appointed, to pursue actions against third parties for the recovery of assets, in the event that it is determined that claims can be brought, either for

transactions at an undervalue or for wrongful or even fraudulent trading. In accordance

with paragraph 83(7) of the Act and Rule 2.117(3) of the Insolvency Rules 1986, creditors

may nominate a different person or persons as liquidator or joint liquidators, provided that the nomination is made after receipt of these proposals and before these proposals are

approved.

3. in the event, that the Court rules that the Company had operated a CIS, to notify the creditors to determine the interest in participating in the return of land under Section 26 of

FSMA in exchange for an unsecured claim against the Company.

4. the Administrators will also investigate and consider methods of dealing with the Company's various land developments on which plots have been sold, including the feasibility of transferring the Company's residual interest in these developments to a third

party or parties that have the necessary FSA authorisation. The aim being to preserve or

improve the value of investors land by that third party pursuing planning consent on behalf of investors and to reduce potential investor claims against the Company.

5. if so agreed at the meeting of creditors, that a Creditors’ Committee be formed consisting

of not more than five nor less than three creditors of the Company for the purpose of

assisting the Administrators in the performance of their duties; and

6. the Administrators’ fees and expenses in respect of the period from 22 April 2008 to

2 June 2008 and for all subsequent periods to be approved by the Creditors Committee

should one be appointed but failing that the Administrators be authorised by the creditors

to draw, on a quarterly basis, remuneration based on a time costs basis in accordance with

the discounted charge-out rates referred to in section 6, together with out of pocket

expenses and VAT.


7. in the event that the Company be dissolved without entering into Creditors Voluntary

Liquidation, that the books and records of the Company be destroyed 12 months after

dissolution.

L A Manning and C M Siddle Deloitte & Touche LLP

PO Box 810

London EC4A 3WA

Documents

UKLI LTD (IN ADMINISTRATION) STATEMENT OF PROPOSALS ... · The sole shareholder of the Company is Baljinder (“Bally”) Chohan. There are a number of other entities controlled by