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The family software marketing firm set up by the Tory party chairman – that marketed software, the sale of which may have been an "offence of fraud" – is to be dissolved.
Labour last year wrote to police calling for an investigation into the firm, How To Corp, for possible fraud and copyright violations. Grant Shapps used the name Michael Green at the firm and cast himself as "multimillion-dollar web marketer". He set up the web sales business in 2005 and three years later transferred ownership to his wife, Belinda. Through its website How To Corp sold a $497 (£313) software package called TrafficPaymaster, an autoblogging programme that created instant cashflow by allegedly plagiarising information.
The software package produced web pages by "spinning and scraping" content and sought to attract advertising, in contravention of Google's code of conduct. Google said it would blacklist sites created by TrafficPaymaster.
In a letter, dated 10 October, addressed to the Labour MP Steve McCabe, who made the original complaint about the firm, the police confirmed that "legal advice … concluded that the selling of the software may constitute an offence of fraud" but that officers had decided not to instigate a criminal investigation.
Companies House filings showed that two weeks later a request was made to wind up How To Corp. Directors can only ask to dissolve a firm and strike it from the company register if it is "not subject to any legal proceedings", current or proposed.
How To Corp's website on Wednesday was not accessible. The site selling TrafficPaymaster could only be accessed with a password.
Labour said it seemed "more than coincidental" the company was to be closed down so soon after a police investigation. Labour has written to the prime minister calling for Shapps to be suspended from the cabinet and an investigation begun under the ministerial code of conduct.
A spokesperson for Shapps said the case was closed and police comments had been taken out of context: "Any suggestion of illegality would be completely improper and malicious and would be treated as such."
Simon Danczuk, the Labour MP for Rochdale, said: "The news that this company is to be dissolved, so soon after a police investigation into its activities, seems more than coincidental and raises further questions in what is an already murky affair.
"If standards in public life are to be maintained David Cameron should launch a proper investigation to determine that Grant Shapps has not been guilty of discreditable conduct. In the meantime he should be suspended from his post as minister without portfolio and as chairman of the Conservative party."
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