Tuesday, 3 January 2017

From £12m to £12,000 inside a year


The death throes of the Premier Group (Isle of Man) Ltd and its associates and subsidiaries, including the company chosen to fund a £21 million waste treatment facility for the Scottish Borders, brought to light more alarming financial information over the Christmas holidays.

The main Yuletide focus has been on Premier's Eco Resources Fund [ERF], which managed to lose millions of pounds of investors' cash in a bamboo plantation venture in Central America. It was revealed around Christmas Eve that the fund had only £12,545.73 left in the kitty, having been valued at £12.9 million on the Channel Islands Stock Exchange in November 2015.

As Not Just Sheep & Rugby has reported in the past, the Eco Resources Fund together with the (also bankrupt) New Earth Recycling & Renewables [Infrastructure] Fund, known as NERR, were the geese which laid golden eggs for parent Premier Group over a number of years.

Various investment funds managed and promoted by Premier yielded an estimated £12 million in fees in 2014 and £10.7 million the previous year.

Premier Group itself went into liquidation on November 30th. Since then the Eco Resources Fund has received a demand from Premier's Joint Liquidator for fees that are due amounting to £2,388,781.11. Correspondence circulated to investors and shareholders says the Fund is not in a position to settle the amount due.

Just before Christmas consideration was given to an extraordinary resolution for members to consider whether the ERF should be wound up. The move was rejected by more than 84% of the stockholders.
The circular from the Fund explains: "The directors have concluded that the overwhelming vote against the resolution is a clear indication of a vote of no confidence in them. This leaves the directors in an untenable position and they have therefore each tendered their resignations from the board with immediate effect."

But prior to resigning the directors were made aware that three individuals - among them John Bourbon, a director of Premier Group (IOM) - had expressed an interest in replacing the existing directors to convene a new fund board despite being aware of ERF's financial affairs together with the demand for more than £2.3 million from Premier.

Now a further meeting has been called on the Isle of Man on January 16th to decide whether Mr Bourbon together with Richard Robinson and Troy Wiseman should be appointed as directors.

A background report shows the £12,545 left in the fund is more than offset by the money owed to creditors totalling £2.731 million. It seems obvious the ERF, like the NERR fund, is now totally worthless; extremely bad news for ERF's 188 shareholders. The 3,253 investors who placed their trust in NERR - along with the elected members of Scottish Borders Council - also have only a snowball in hell's chance of a return.

The tangled financial web resulted in the fund owning 100% of the issued share capital of ERF Ltd. In turn ERF Ltd owns 2,000 shares of Eco Planet Bamboo (Isle of Man) Ltd. [EBIOM] and is owed $51 million by EBIOM.

EBIOM in turn owns two Delaware registered bamboo plantation owning companies. The financial position of EBIOM and the Delaware companies is not known at this time, ERF shareholders and creditors are told. Follow that trail if you can.

Yet while separate detailed investigations are proceeding into the affairs of Premier Group, ERF, NERR, and by the administrators of the council's contractors New Earth Solutions Group, an inquiry into the loss of at least £2.4 million thanks to the incompetent and negligent actions of the Borders local authority has never even been mentioned.

It brings the yawning gap between the regulation of private entities and public authorities into sharp focus. SBC, now wrestling with a £9 million 'funding gap', was able to write off its losses in the New Earth fiasco without so much as a by your leave and move on as though nothing was amiss. Cash strapped Borders council taxpayers who face an increase in demands from their local authority from this April are left to pick up the tab.

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