Monday, 14 December 2015

New Earth fund's new potential victims


who discovers the suspended fund which was to have financed a multi-million pound waste treatment facility for the Scottish Borders is having a negative impact worldwide.

Almost a year after the disastrous contract between waste handling 'specialists' New Earth Solutions (NES) Group and Scottish Borders Council (SBC) collapsed, owing local council taxpayers more than £2 million, the sub-plots involving companies and funds linked to the ill-fated project are hitting investors and shareholders on a global scale.

It was the Isle of Man-controlled New Earth Recycling and Renewable (NERR) Fund which was to have provided the capital for the development of a "ground breaking" treatment centre at Easter Langlee on the outskirts of Galashiels.. So presumably SBC lead councillors and senior officials carried out rigorous checks before awarding the vital environmental deal to NES and their paymasters, Premier Group.

A few months after the original contract was agreed in 2011 for the tried and tested conventional facility which would have diverted 80% of Borders rubbish from landfill, Premier Group director Jamie Sutton told the renowned Wealth Advisor website the various funds under his company's control were managing £500 million of investments with NERR gaining £2.5 million per month and achieving double figure returns annually.

According to Mr Sutton: "With a decent track record, we are confident that new investments will continue to grow at least at this rate and higher if the economic recovery can gather pace. Investors in the fund are high net worth individuals investing directly or through international life companies and/or pension funds".

He added that investment risk was managed from the outset when the full cost-benefit case was prepared for consideration by the investment committee. Mr Sutton explained: "Corporate risk is monitored at board level, where the fund has director representation of the New Earth Solutions Group as well as in any SPV (Special Purpose Vehicle) set up to hold recycling facility assets".

In the Borders case the SPV was New Earth Solutions (Scottish Borders) Ltd, a company established in 2011 with just two £1 shares held by another New Earth business called NES Management Services LLP.

But barely two years after Mr Sutton's upbeat interview the NERR fund was suspended with all subscriptions into it ceasing from January 8th 2014 and all redemptions to investors and shareholders banned from November 7th 2013.

That remains the position to this day, and it seems clear NERR could not have funded the Easter Langlee plant. In a recent missive to those affected by the fund's suspension, Premier director Michael Richardson warned: "The Fund is currently considering a number of restructuring options with potentially different outcomes for the calculation of the net asset value. As a consequence, at this time, the directors are unable to provide any indicative value for investors."

As hundreds of investors in the UK, Europe and beyond find their money locked up in the suspended NERR fund, Not Just Sheep & Rugby has learned that a New Zealand company involved in the transfer of pensions from Great Britain has been forced to place its own temporary suspension of all member redemptions.

GBP International, based in Auckland, had invested most of its 3.18 million New Zealand dollars in NERR and its sister EcoEarth Resources fund which has also been suspended by Premier Group. Apparently Premier had been inundated with requests for withdrawals from that fund which specialises in the development of bamboo plantations in Central America.

Investment News NZ reported that the GBP scheme accounts revealed: "The trustee is uncertain when the scheme will be able to lift this suspension as it is reliant on the lifting of redemption suspensions on at least one of the underlying investments..."

Tony Chamberlain, GBP International's co-director, confirmed that the scheme prospectus had been withdrawn. He was not at liberty to give any further information.

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