Monday, 5 December 2016

At a loss to explain collapsing funds


The offshore fund managers who were supposed to come up with the cash for a £21 million waste treatment centre to serve the Scottish Borders have announced that for the fourth time in less than six months one of their collection of investment companies is to be wound up and liquidated.

Premier Group (Isle of Man) Ltd.'s website carries the upbeat banner headline "intelligent and innovative investment ideas". Perhaps those words convinced Scottish Borders Council that one of the financial casualties in Premier's stable - New Earth Recycling & Renewables [Infrastructure] PLC or NERR - could fund the all singing, all dancing treatment facility planned for Easter Langlee, Galashiels.

Investigative work by Not Just Sheep & Rugby staff has shown NERR never had the resources to bankroll the project which was terminated jointly by the Council and contractors New Earth Solutions Group (NESG) in February 2015.

And NERR finally succumbed to financial meltdown in July of this year when joint liquidators were appointed to oversee an organisation with debts/liabilities of at least £113 million. Warnings have already been issued that investors will get nothing back once the mess is sorted out and liquidators Deloitte are paid for their work.

But new information obtained via Freedom of Information shows it had been stated as early as 2013 that the funding from NERR for Easter Langlee was no longer available meaning the ill-fated venture had no funder of last resort from that time.

However, it is claimed it was not in the Council's best interests to pull out of the contract within the first year "as this would have financially cost the authority millions of pounds". Involvement with the now bankrupt NESG did cost Borders council taxpayers £2.4 million while failure to deliver the Galashiels facility is said to have cost New Earth twice that figure. It is unlikely the public will ever know the true scale of either side's losses.

The 'death' of Premier's worthless NERR fund, which brought in generous fees for the company's top brass, has been quickly followed by the collapse of three other funds. Yet as of today this 'bust' threesome is still being promoted on that Premier Group website as opportunities to invest cash.

An Extraordinary General Meeting [EGM] of the so-called Premier Diversified Property Fund was arranged for September 26th to pass a motion to wind up the company voluntarily and to appoint a liquidator. The last published accounts for this particular operation showed losses of £13.6 million for the sterling sub-fund, E2.295 million for the Euro sub-fund and $1.231 million for the dollar sub-fund.

There was a similar fate awaiting the Premier Portfolio Fund PLC. An EGM was fixed for October 19th to wind the company up voluntarily with the appointment of a liquidator. The fund experienced a loss of £8.5 million in the year to June 2013 with a further loss of £531,000 in the twelve months to October 2014.

The latest financial casualty under the Premier umbrella is the Premier Eco Resources Fund in which shareholders were invited to take a stake in bamboo forests in faraway central America and South Africa.

Following desperate moves to save this outfit a notice has been published with details of an EGM on December 19th to consider a proposal to voluntarily wind up the fund "as the company cannot by reason of its liabilities continue in business". As of December 2014 the Eco Resources company had liabilities totalling £51.3 million, up from £36.9 million the previous year.

Investors have been told that an inspector is to be appointed by the Isle of Man authorities in a bid to investigate the circumstances surrounding the collapse of this Premier entity. Reports may also flow from the liquidation of the NERR fund while administrators continue to work at NESG.

We ask yet again: What was the nature of enquiries made by Scottish Borders Council before deciding in 2010/11 to sign a contract with NESG, and become linked to its offshore funding partner NERR and the controlling Premier Group?

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