Sunday, 26 March 2017

Another fine Premier mess exposed


Correspondence and court papers concerning the financial collapse of the controversial Eco Resources Fund [ERF] have revealed that action could be taken against those involved in the affairs of an entity which will cost investors and shareholders many millions of dollars.

The bankrupt ERF was managed and promoted by the same Isle of Man group which controlled the equally useless fund chosen by councillors in the Scottish Borders to bankroll a £21 million waste treatment plant to handle the region's domestic rubbish.

Liquidators are currently picking their way through the wreckage of the New Earth Recycling & Renewables [Infrastructure] Fund (NERR) following its multi-million pound crash last year.

The failure of NERR to provide the money for the Borders waste treatment project meant the facility was never built and now tens of thousands of tonnes of garbage will have to be taken out of the region in lorries for treatment elsewhere.

NERR like ERF was a lucrative earner for the individuals who ran Premier Group (Isle of Man) Ltd., the investment business which is also in the hands of liquidators with its subsidiaries in complete disarray. The two funds provided millions of pounds in fees and commissions for Premier's directors.

The ERF fund encouraged investors to sink their cash into bamboo plantations in Nicaragua and South Africa with the promise of returns of between 500% and 850% from the 'green' environmentally friendly project.

But investigative work by Gordon Wilson, receiver and liquidator of ERF since the Isle of Man courts ordered the fund to be wound up, has confirmed the worst fears of the investors.

In a letter to shareholders, Mr Wilson says he recently met Troy Wiseman, the American businessman in charge of Eco Planet Bamboo - the organisation developing the plantations - who confirmed that US-based Sustainable Asset Lending [SAL] had foreclosed on the shares in the bamboo plantation companies which were formerly owned by ERF subsidiary Eco Planet Bamboo (IOM) Ltd. That meant the fund had no remaining interest in the plantations.

Mr Wilson wrote: "Mr Wiseman indicated that the fund might be able to buy the plantations back. However no progress had been made about that and in the event the fund lacks the resources necessary to make any purchase for the indicated amount of $10 million. Accordingly other than the small balance of cash (reported to be £12,000) the fund has no assets of any realisable value."

The letter concludes: "I consider it unlikely that investors will see any return on their investment in the fund and creditors are unlikely to receive any distribution either. In light of the financial difficulties dating back almost two years I don't expect that this news will come as a surprise to you.

"I hope that through liquidation a fuller explanation of what has happened here might be forthcoming and that any necessary action against those involved n the affairs of the fund might be taken".

A great detail of background of ERF's collapse is included in the Isle of Man Financial Services Authority (IOMFSA) petition to the Manx court seeking a winding up order.

The court papers reveal that 99 of 100 management shares in ERF are held by Premier Group Distribution Inc. [PGDI], an off-shore entity based in the tax haven of British Virgin Islands.

Not Just Sheep & Rugby discovered last year that the NERR fund was controlled from the same BVI address which just happens to be the offices of law firm Mossack Fonseca who featured in the so-called Panama Papers. PGDI shareholders and beneficiaries include former directors of Premier Group and its businesses.

IOMFSA's petition gives a complete timeline of events leading up to ERF's demise. The document claimed a winding up order - it was granted by the court - was desirable to address the concerns surrounding the operation of the fund.

It states: "It is a matter of public interest and concern that Isle of Man financial institutions accepting investments should adhere to recognised standards and investors should have an appropriate degree of assurance in relation to their investments".

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