INVESTORS in an under-fire storage pod empire have already been paid out £40million in compensation, a court heard.

An investigation is also underway by HM Revenue and Customs over potential VAT liabilities for Store First companies, the High Court has heard.

Lawyers representing Store First, headquartered in Padiham, are fighting an attempt by Business Secretary to wind up five of their related companies, including a site off Davyfield Road, Blackburn.

Referring to the Financial Services Compensation Scheme, Paul Chaisty QC, for the Secretary of State, said: “It would appear that they have paid around £40.7million in compensation to 1,200 or so investors.”

He told the Business and Property Court hearing that there were concerns regarding the companies’ ability to meet future liabilities.

Mr Chaisty said while the company insisted it was “financially sound”, it had also indicated their entities had made little profits over the past few years.

He also told the court that the Customs and Excise department had also intimated that they were pursuing enquiries in respect of VAT liabilities.

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Earlier the court heard Store First had raised £209million, from 6,600 investors, for around 22,000 units nationwide, between 2011 and 2016.

The Secretary of State claims that the storage pods were sold using “misleading” information and testimonials.

But Nicholas Peacock QC, for Store First, said his clients denied these claims and insisted it was in the best interests of investors to allow the companies to continue trading. The pods had not been sold since September 2016.

He told the court the companies were willing to give a number of undertakings, including taking on leases for unwanted pods and a ‘profits top-up’ scheme and audited annual reports.