Sunday, 13 March 2016

SBC's funders face day in Spanish court


The offshore finance Group selected by members of Scottish Borders Council to fund a multi-million pound waste management project is facing a six million euro writ from British ex-pats living in Spain who claim to have lost substantial sums of cash via an alleged fraudulent investment scheme.

Premier Group (Isle of Man) was supposed to provide the capital for a state-of-the-art facility at Easter Langlee, Galashiels, to deal with up to 55,000 tonnes of the region's garbage each year.

The money did not materialise, the project was dogged by insurmountable technological issues, and the contract between council and developers New Earth Solutions was abandoned in February 2015 after the local authority squandered at least £2.4 million of public money on the undeliverable scheme.

Premier's New Earth Recycling & Renewables Infrastructure PLC [NERR] is one of a range of different investment funds managed, controlled and administered from the Isle of Man. But according to documentation, the Group's ultimate parent company is based in the British Virgin Islands.

A confidential report approved by SBC members in March 2011 when the original contract for the waste plant was signed includes the following recommendation: "The Head of Legal & Democratic Service or the Clerk to the Council be authorised to execute the Direct Agreement with the Special Purpose Vehicle [New Earth Solutions (Scottish Borders) Ltd] and its funder (New Earth Recycling & Renewables Infrastructure PLC), the purpose of the Direct Agreement being to enable the funder to step in to assess and, if possible, rescue the project in circumstances where the council would otherwise have a right to terminate the contract."

Despite the fact that the contract was terminated over a year ago, SBC maintains that confidentiality clauses in their dealings with New Earth Solutions [and presumably Premier Group IOM] remain valid until 2021.

The Spanish legal action against Premier Group and an associate company Surrenda-Link Mortgage Funding is being conducted by lawyers on behalf of fourteen members of an organisation called Equity Release Victims' Association [ERVA].

The basis of the claim is that neither Premier nor Surrenda Link had permission to operate in Spain, and that they orchestrated the marketing and sale of a financial product for inheritance tax mitigation purposes.

A spokesperson for Lawbird, the Marbella-based law firm representing the interests of ERVA, told Not Just Sheep & Rugby: "The main allegations contained in the writ reveal a great deal of anxiety and worry, consistent with a very significant claim value of circa 6 million Euros".

The main purpose of the Premier product, sold with the name SITIRS [Spanish Inheritance Tax and Income Release Scheme] was to reduce or mitigate Spanish inheritance taxes.

The ERVA spokesperson explained: "According to Premier's lawyers, the SITIRS was devised and promoted by ‘another’ company called Premier Balanced Distribution Inc, based in British Virgin Islands, a revelation that logically exonerates them from any responsibility."

However, evidence is expected to be produced in court showing that both Premier companies were the same, having shared  offices, telephone and fax numbers and email and website addresses.

An interesting post on the ERVA website claims: " Such is the confidence of The Premier Group’s Spanish counsel that they liberally dub lawyers acting for the claimants as clumsy and inept.
What these lawyers have not realised is that the mastermind of this illicit tax-evasion mechanism, boasts the following on his website:
'2001 founded the forerunner fund group that became Premier and has been actively engaged in the design and management of many offshore funds. The Premier Group (Isle of Man) Limited (“Premier”) is the successor of a fund group established in 2001 and is responsible for designing, distributing and managing a range of investment funds to investment intermediaries and financial institutions throughout the UK and international markets.'

ERVA's spokesperson told us: "The judge fixed the date for the preliminary hearing of our case which was held on the 10th November 2015. That day, all the parties involved explained verbally their positions to the judge and proposed the evidences which supports their positions. The judge fixed the date for the second and final hearing of our case, which will be held [in Bilbao] on the 14th July 2016. We should receive a ruling a few months after this."

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