Investors in United Land Holdings - the "landbanking" company whose stand at the Ideal Home Exhibition 2006 was shut down by the Department of Trade - have learned they have no legal title to land they thought they had bought.

In all, investors paid in £5m - around £10,000 to £15,000 for each small plot of agricultural land they purchased, convinced by ULH that it could get planning permission for housing, so multiplying their money many times. Now they have nothing, not even a narrow strip of farmland.

The government pulled the plug on ULH "in the public interest" in April 2006 for operating an unregulated investment scheme.

In July 2006, director Martyn Hayes told Guardian Money he would challenge the ULH closure. "We are putting together an argument that will stop ULH investors from losing out. We have lawyers working on this."

However, they failed to attend a court hearing in July this year, leaving the company to go into liquidation.

Documents from the official receiver, part of the government's Insolvency Service, now reveal ULH never legally purchased the property it sold on to landbanking clients. These show that sister company United Land Acquisitions paid £1.5m for a 42.5 acre site at Melksham, Wiltshire - "substantially more than the market price for agricultural land." But this purchase was never registered as the £61,810 stamp duty was never paid. The official receiver does not have the cash to fund this, so the land remains with its previous owner.

Despite having no legal title to this land, ULH sold it on to investors.

Keith Cox from Bedford was one of the 470 ULH victims. He says: "I bought land in Wiltshire and also at Chicksands here in Bedfordshire. I have never received any legal paperwork to either site. I've lost more than £20,000. Just where is all the money? None of the official receiver's documents give any idea where it all is."

Mr Cox adds: "There were loads of glossy brochures. But it now appears to have been a delusion - all made up."

ULH directors including Hayes and Mark Faulkner made much of their "expertise" and "strong team of planning experts". But all their experience was in conservatory sales and installations.

Faulkner told the official receiver he had been at an exhibition selling conservatories in autumn 2003 when he saw landbankers marketing land without planning permission on another stand. He moved into that business.

Hayes then switched from conservatories to landbanking and set up the Land Investment Association, purportedly an independent body for the industry - in reality, just a rubber stamp for ULH.

The judge in the liquidation case said: "It is clear the public has been duped into investing in land that is presently of little value. There were fundamentally dishonest representations to investors. ULH was used as a personal moneybox."


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