An Ayrshire businessman who conned investors out of £2.8m has been banned from running a business for 14 years. 

Kenneth Campell's lengthy disqualification comes after an investigation by the Insolvency Service.

He was the sole director of HGEC Capital Ltd.

In a slick brochure presented to investors, the company claimed 2018’s downturn in the oil price presented an opportunity.

It listed a number of oil and gas sites in Texas that, it said, were worth $89,360,000 at the time, but which it claimed could be sold for $666,000,000 in 12 months.

However, according to the Insolvency Service it was little more than a Ponzi scheme. 

READ MORE: HGEC Capital Ltd: Dad's final years 'blighted' by £155k loss

The Court of Session heard that Campbell had sought investment in the company from clients between June 2018 until it folded in February 2020.

However, the new funds were then used to make negligible interest payments to existing investors.

Most of the money was sent to third parties, and hundreds of thousands of pounds was paid to Campbell himself, with only around £430,000 invested in the intended scheme.

The Insolvency Service says that among those who benefitted from the company were Cheryl McGregor, wife of former Rangers goalkeeper Allan McGregor, who received £700,000, and a director of a connected company, who received £526,000.

The company’s administrators recovered £900,000 from Mrs McGregor through a gratuitous alienation claim – a claim against money that was given while the benefactor was insolvent.

The Insolvency Service made clear that there is only evidence of wrongdoing by Campbell. 

Their investigators found that he paid himself £194,000, and payments of £360,000 were paid to consultants in HGEC.

The total loss to investors when the company folded was £2.8 million.

Rob Clarke, Chief Investigator of Insolvent Investigations North at the Insolvency Service, said: "Many of Kenneth Campbell’s victims are members of the public who lost their life savings due to his deceit.

"Campbell dishonestly took money from people at a time when he knew no investment would be made, and the lengthy disqualification ordered by the court illustrates the seriousness of his actions.

"This ban should act as a strong deterrent to others who consider doing similar, and assure the public that the Insolvency Service will take the strongest action where such fraudulent actions are concerned."

Campbell's 14-year disqualification, which began on 7 September 2023, will prevent him from acting as a director and becoming involved in the promotion, formation or management of a company, without the permission of the court."

Last year, The Herald on Sunday spoke to Jane Rainbow, a retired teacher who invested savings in the scheme.

Her dad, Ronald Thomas, eventually ended up investing more than £155,000 in the scheme.

He died in 2021, with his final years "blighted" by the loss. 

Campbell was sequestered on December 3, 2019. According to the public Register of Insolvencies.

Ayr Sheriff Court appointed Begbies Traynor as the administrator for HGEC Capital in February 2020 following a petition submitted on behalf of an offshore fund registered in the Cayman Islands.

It has previously been reported that Glasgow-based businessman Richard Cook, a former Scottish Conservative candidate and treasurer of the party, signed a deed of trust between HGEC Capital and a Texas oil firm run by a man described by a judge almost a decade earlier as “a repeat offender with criminal convictions for securities fraud”.

On behalf of HGEC Capital, Mr Cook made a number of visits to the US on the company’s instruction and also registered the firm’s website.

Under the deed of trust signed by Cook, HGEC Capital – formed in Glasgow in 2018 – agreed to lend $14.3 million to Texas Gulf Coast Secured Lenders Joint Venture LLC in return for oil and land rights.

There is no suggestion of any wrongdoing on Mr Cook’s part, and his lawyers say he had “no involvement with any investor in, or in securing any investment in, HGEC”.

Mr Cook is now working with Begbies Traynor and creditors “to advise them with a view to securing recovery of funds”.

The real owner of the Texan properties, according to the deed signed by Mr Cook, was a company called Houston Gulf Energy Corporation.

This firm was run by John Ehrman, who at the time was being indicted by a grand jury over a $2.3m lease fraud involving a series of oil wells in Texas. He was sentenced to 42 months in prison for fraud in August 2018.

Houston Gulf Energy Corporation went into receivership in Texas in March 2019 and the administrators say that the receiver “had never heard of either Mr Campbell nor HGEC Capital Limited”.