by DOUGLAS SHEPHERD
The spectacular failure of the bamboo-based Eco-Resources Fund [ERF] is to be investigated by a liquidator following confirmation that lenders have foreclosed on plantation assets in Nicaragua and South Africa.
An Order to wind up the ERF - closely allied to another bankrupt outfit chosen by Scottish Borders councillors to fund a £21 million waste management project - was issued by an Isle of Man judge last week on receipt of an application from financial services regulators.
The various 'investment' entities which seem likely to deprive thousands of investors of many millions of pounds were all under the control and direction of Premier Group (Isle of Man), itself penniless and in the process of being dissolved by insolvency experts. It is unclear whether Premier's links to at least three intermediary companies based in the tax haven of British Virgin Islands will feature in any of the ongoing enquiries.
Court papers from the Manx authorities show that two individuals appeared at Thursday's hearing to oppose an application to wind up the ERF which had been tabled by the Isle of Man Financial Services Authority (IOMFSA). They are named as Ray Withers and Patrick Barker. But the Order was granted with Gordon Wilson named as official receiver.
Mr Withers is the Chief Executive and co-founder of a property investment company called Property Frontiers.
According to the excellent Redd-Monitor website, which has investigated and exposed a clutch of global environmental investment scandals, Property Frontiers organised an investment seminar in London in 2011. Flyers prepared for the event held out the prospect of 895% returns for investors in the bamboo plantations.
A year later Troy Wiseman, the man in charge of Eco-Planet Bamboo - ERF was part of the set-up - quoted potential 500% returns over a 15-year period on an investment of $50,000.
Now, Mr Wiseman has advised that US-based Sustainable Asset Lending has foreclosed on the plantation assets, "therefore any recovery appears unlikely".
IOMFSA warns: "At this stage it is not possible to estimate the amount of any recovery on the investments made by Eco. The financial distress of the underlying companies and the apparent foreclosure does however mean that substantial recovery of value from the plantations may be unlikely".It seems 190 investors stand to lose up to $61 million.
Meanwhile, over at the insolvent New Earth Recycling & Renewables [Infrastructure] PLC fund (NERR) thousands of stakeholders are anxiously awaiting an update from liquidators Deloitte. In a virtually identical financial disaster to that of ERF, those who invested money in NERR have been told they are unlikely to get their cash back.
NERR's inability to provide the resources for the Borders waste treatment incinerator at Galashiels left Scottish Borders Council years behind in the race to eliminate landfill and boost recycling levels. The council's decision to place their trust in NERR cost taxpayers at least £2.4 million, and on top of that the local authority is having to develop a £6 million waste transfer station on the site of the proposed treatment plant as it ponders an alternative waste strategy.
The nature of ERF's collapse is almost as complicated as the network of organisations which made up its structure. Premier Group resigned as the fund's manager in December 2016, the administrator's tenure was terminated and fund custodian (Kleinwort Benson Channel Islands) has given notice that it is withdrawing its services.
A detailed news release from IOMFSA explains: "The Company Secretary resigned with effect from March 9 2017, leaving the fund with no functionaries. The fund is unable to pay its debts as they fall due."
The Official Receiver will now hold separate meetings of the creditors and sharefolders of ERF. After those meetings, Eco will then be under the control of a liquidator.
"As part of the assessment the liquidator will need to investigate the circumstances which led to the failure of Eco", adds the press statement.