What is asset stripping?
Asset stripping is taking company funds or assets of value while leaving behind the debts.
Company directors transfer only the assets of one company to another and not the liabilities. The result is a dormant company with large liabilities that cannot be met and it has to be put into liquidation
Stripping of company assets is normally done for two main reasons:
- The fraudsters deliberately target a company or companies to take ownership, move the assets and then put the stripped entity into liquidation
- "Phoenixing" - directors move assets from one limited company to another to 'secure' the benefits of their business and avoid the liabilities. Most or all the directors will usually be the same in both companies. This usually arises as a way of 'rescuing' the assets of a failing business rather than targeting a company
Where can I get more information?
Suspected phoenix firms and asset stripping are investigated: by the
- Financial Services Authority
- Companies Investigation Branch, (part of the regulatory arm of the Department for Business, Innovation and Skills).
Should I report to the SFO?
We only conduct investigations into asset stripping where the seriousness and complexity meets our acceptance criteria. If you have information, then please submit as much information as possible at: https://report.sfo.gov.uk/sfo-confidential---provide-information-in-confidence.aspx or contact us directly through our SFO Confidential information hotline on 0207 239 7388.
