Judge Refuses to Throw Out Investors’ Case Over Money Allegedly Siphoned from Property Project

A group of investors who say they lost £3.22 million on a London property development has won an important early battle in the High Court. A judge has refused to dismiss their case, which will now go to a full trial, expected in February 2027. 

The Allegation

The investors put their money into Sandycombe Development Limited, a company set up in 2018 to build on a single site on Sandycombe Road, Richmond. They say the people running it, Sandeep Singh Mangat and Sukhdeep Dhillon, used the company’s money and borrowing for something else entirely: separate property projects in Birmingham, run through other companies linked to Mr Mangat. 

According to the investors, money meant for Richmond was diverted to fund those projects, and the investors were then kept in the dark about what was happening. The company collapsed in 2024 when receivers were appointed, and the investors say their shares are now worthless. 

These are allegations only. The respondents deny them, saying the transactions were legitimate business decisions made in good faith, and that the losses were simply the result of a risky development failing. Nothing has been proven. For the purposes of this hearing, the judge had to assume the investors’ version of events was true.

For more information, read the full case on Re Sandycombe Development Ltd [2026] EWHC 1776 (Ch)

What the Hearing Was About

The hearing did not decide who was right. The directors and their associates asked the court to end the case before trial, arguing that the investors were bringing the wrong kind of claim. 

Their argument ran like this. If a company’s money is taken, the company is the victim, and the shareholders’ shares merely fall in value as a knock-on effect. The law has a long-standing principle that shareholders generally can’t sue for that kind of knock-on loss in their own right. Any claim, the directors said, belonged to the company. 

The Judge’s Answer

Mr Justice Cawson disagreed. He pointed out that company law gives minority shareholders a specific route for this situation: asking the court for relief where a company’s affairs have been run in a way that is “unfairly prejudicial” to them. This remedy is deliberately broad and flexible. 

He said it would make little sense to bar investors from that route just because the alleged misconduct wiped out the value of their shares completely, rather than merely reducing it. He also relied on a 2023 Court of Appeal decision, which confirmed that investors can ask for several remedies in a single case, including being bought out at a fair price and having money returned to the company. 

The judge also rejected the suggestion that other shareholders would be harmed if the case went ahead. Any money returned to the company would benefit them, and they would remain free to bring their own claims. 

Judge Refuses to Throw Out Investors Case

Why It Matters

The ruling is a reminder that minority investors in private companies are not powerless when those in control are accused of misusing company money. It does not mean the investors will win, only that their case will be heard in full. 

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