Raymond Doherty 15 Aug 2018 11:06am

500 investors sue Ingenious over film scheme

A group of 500 investors have launched legal action against funding company Ingenious Media claiming they were misled over a film scheme

The group – which includes Andrew Lloyd Webber and a number of high profile bankers – claim that the promotional materials for the Ingenious film investment schemes “made representations of fact which were false and which they had no reasonable grounds for believing were true”.

This induced the claimants into joining the plans and losing money, according to court documents seen by Bloomberg.

Stewarts Law head of tax litigation David Pickstone, who is representing the claimants, said they expect to recover around £200m.

Patrick McKenna, the Ingenious chairman who is also a defendant in the lawsuit, told Bloomberg that the claims were “without merit and will be vigorously defended”.

Ingenious has attracted significant controversy and media attention over the past few years in relation to its investment schemes.

The funding company has consistently maintained that its scheme is a legitimate film partnership and not just a means for engineering aggressive tax avoidance, which is what HMRC contends.

In 2016 both Ingenious and HMRC claimed victory in a long-running tax avoidance dispute case.

Also that year, Ingenious won a Supreme Court battle against HMRC. The case centred around a press briefing given to two Times journalists by then-HMRC permanent secretary for tax, Dave Hartnett, in 2012.

During the course of the briefing – agreed to be “off the record” – the journalists instigated a conversation with Hartnett about Ingenious, McKenna and a film investment scheme. Some of the information was used in a later Times story.