by EWAN LAMB
Scottish Borders Council has been told in no uncertain terms there is strong public interest in understanding what steps it took to ensure its disastrous waste management contract which cost taxpayers at least £2.4 million was "robust".
Rosemary Agnew, the Scottish Information Commissioner (SIC), has handed down a wide ranging decision which instructs SBC to disclose the entire contents of five reports which they had been determined to keep secret or at least heavily censored.
The documentation had been requested under Freedom of Information, but the local authority repeatedly refused applications, claiming publication of financial and technological material about their contractors New Earth Solutions Group (NESG) would damage that company's commercial interests and hand advantages to its competitors.
However, following nine months of intensive investigations by Ms Agnew's staff, it was discovered that much of the information withheld from the five reports related not to NESG and its technological or financial assets, but to the council's own financial or administrative matters.
"That one paragraph in Ms Agnew's decision notice appears to point to a deliberate cover up by SBC over a considerable period of time", was how one local government expert summed up the situation for us.
And the council's stance must have been considerably weakened and made to look somewhat ridiculous when SIC's investigating officer found that some of the withheld information had been published on the internet.
In a submission to SIC, the council said the withheld information was "commercial or industrial in nature". It related to commercially sensitive issues, both in terms of financial arrangements and in respect of the technology which NESG intended to implement in its facility at Easter Langlee.
But in fact the inability to deliver both the technology and the hard cash to build the waste treatment plant were the reasons why the council's risky venture failed, and the project had to be abandoned. Yet SBC maintained its policy of strict secrecy even after NESG plunged into bankruptcy.
SBC's arguments on those grounds have been dismissed by the Commissioner. She says: "Having considered the information which the council has withheld in this case, the Commissioner is not persuaded that it is all covered by the confidentiality agreement in the contract.
"The council has not explained clearly why the information withheld from the five reports is covered by the confidentiality clause. It is not explained why the information is commercially sensitive, and has only provided general arguments in relation to the harm that would, or would be likely to be caused by disclosure".
SBC considered the withheld information to be of market value. It could, in its view, be used not only for the advancement and exploitation of the innovative technology, but for future contract bids within the waste industry. As soon as the information was placed in the public domain, it would strip the owner of the information of the benefit it is entitled to as owner..
"The council's arguments focus on the detriment which the successor company to NESG would suffer, if technological information was placed in the public domain, allowing competitors to benefit", states Ms Agnew. "It has not addressed the fact that most of the information withheld from the five reports does not consist of technical data. The council has not explained why information relating to its own matters is still sensitive".
In relation to the technological processes which NESG intended to implement at Easter Langlee, the Commissioner decided that there was 'far more information in the public domain than the council has acknowledged (or was perhaps aware of)'.
She said it was generally accepted that technology changed and developed over time and what was once considered innovative and secret often became standard and widely known as time passed.
"The Commissioner accepts that there is significant public interest in understanding what steps the council took to ensure the project was robust. There is strong public interest in understanding what measures that the council had taken in order to limit its financial exposure in a project which had been on-going for four years and had involved substantial sums of public money.
"In the Commissioner's view, disclosure of the withheld information would serve the public interest in informing the public about the actions and decisions taken by the counci, the basis for those actions and decisions, and the reasons why the project failed. As noted above, the project had involved many years of work, and substantial sums of public money".
Ms Agnew says the integrated waste management project would have had a direct effect on residents in the council area. She had given weight to the particular circumstances of the case, which incurred the council investing substantial time, money and resources, in a project that ultimately did not come to fruition.
In the circumstances, the Commissioner finds it legitimate for the public to seek to understand what happened, and in the public interest for this understanding to be as complete as possible.
Scottish Borders Council has been given until June 12th 2017 to release the information. The local authority has the right to appeal to the Court of Session on a point of law only.
Sunday, 30 April 2017
"Risky" council loans under the spotlight
EXCLUSIVE by DOUG COLLIE
A collection of eleven so-called LOBO loans totalling £43 million which were taken out by Scottish Borders Council between 2002 and 2006 are now valued at £71 million, a research project by an independent organisation has revealed.
Figures obtained under Freedom of Information also show that the interest rates paid by SBC on the bank loans during 2016 exceeded the percentage charged by the Public Works Loans Board [PWLB] in every case.
And an attempt by Ludovica Rogers, a member of Debt Resistance UK [DRUK], to obtain copies of invoices for brokers' fees charged when the loans were arranged for SBC proved unsuccessful after the local authority told her the information was "no longer held".
The same reason was given for not supplying the requester with copies of contracts, invoices and tender documents for Treasury Management Advisers used to facilitate the eleven loans from Belgian, Irish and German banks and from Barclays. Again, the paperwork was said to be no longer retained on council files.
LOBO (Lender Option Borrower Option) loans are held by over 60% of UK local councils and housing associations who turned to them around the time of the global financial crash. But experts say LOBOs are "risky and toxic" with variable interest rates which increase repayments as time goes by.
Servicing loans is already a significant drain on resources at SBC, as it is on every public authority in the country. According to their latest audited accounts the Borders council forked out £12.32 million on "interest payable and similar charges" in 2015/16. The equivalent sum for 2014/15 was £11.806 million. These amounts far exceed the £8.9 million in savings which the council has been forced to make in its 2017/18 budget.
Total liabilities at SBC at fair value are quoted at £359.322 in 2015/16, up from £337.273 million in the previous financial year. This includes the portfolio of loans drawn down over many years from the PWLB, an executive arm of The Treasury which lends money to local authorities.
In 2016 the average interest rate charged by PWLB was 2.55% on the loans it issued. Interest paid by SBC on the eleven LOBO loans in its collection ranged from 2.87% to 4.2%.
Borders taxpayers will have to continue funding repayment of the LOBOS until 2065. Copies of the loan agreements supplied to Ms Rogers show they varied in length from 45 to 60 years.
DRUK claims on its website: "Debt affects all of us, whether it's personal, local council or national, we are implicated in the system which makes the majority poor and powerless and keeps the one per cent in power.
"Bankers, brokers and advisers have tricked councils into taking out expensive, risky loans, endangering our essential services. Taxpayers' money is being unnecessarily wasted while the private sector is making huge profits".
SBC has arranged two recent loans from the PWLB totalling £12 million.
Details published by the agency show that on February 24th 2017 the council was advanced £8 million over 10 years at 2.05%. And on September 29th 2016 a loan of £4 million was agreed, again over 10 years at 1.49%. The reasons for the loans being taken are not specified.
The LOBO portfolio obtained by Ms Rogers is published below.
BANK SUM BORROWED CURRENT RATE FAIR VALUE YEAR
BARCLAYS £6,000,000 2.87% £10,644,275 2005
DEXIA £3,000,000 3.70% £4,923,092 2004
DEXIA £3,000,000 4.03% £4,923,092 2004
DEXIA £3,000,000 4.20% £4,923,095 2004
DEXIA £5,000,000 3.82% £7,925,583 2005
DEXIA £5,000,000 3.75% £7,805,971 2005
DEXIA £5,000,000 3.80% £7,885,250 2005
DRESDNER £4,000,000 2.95% £6,552,578 2004
DRESDNER £4,000,000 3.50% £6,552,578 2004
WEST LB £3,000,000 4.10% £5,866,924 2006
EUROHYPO £2,000,000 2.95% £3,013,545 2006
TOTALS £43,000,000 £71,015,983
Dexia Bank, a Belgian-based institution, which had to be bailed out in 2011. It is now known as Belfius Bank.
Dresdner Bank, a German fiunance house, was acquired by its rival Commerzbank in 2009. Commerzbank also owns Eurohypo. West LB is based in Dublin.
A collection of eleven so-called LOBO loans totalling £43 million which were taken out by Scottish Borders Council between 2002 and 2006 are now valued at £71 million, a research project by an independent organisation has revealed.
Figures obtained under Freedom of Information also show that the interest rates paid by SBC on the bank loans during 2016 exceeded the percentage charged by the Public Works Loans Board [PWLB] in every case.
And an attempt by Ludovica Rogers, a member of Debt Resistance UK [DRUK], to obtain copies of invoices for brokers' fees charged when the loans were arranged for SBC proved unsuccessful after the local authority told her the information was "no longer held".
The same reason was given for not supplying the requester with copies of contracts, invoices and tender documents for Treasury Management Advisers used to facilitate the eleven loans from Belgian, Irish and German banks and from Barclays. Again, the paperwork was said to be no longer retained on council files.
LOBO (Lender Option Borrower Option) loans are held by over 60% of UK local councils and housing associations who turned to them around the time of the global financial crash. But experts say LOBOs are "risky and toxic" with variable interest rates which increase repayments as time goes by.
Servicing loans is already a significant drain on resources at SBC, as it is on every public authority in the country. According to their latest audited accounts the Borders council forked out £12.32 million on "interest payable and similar charges" in 2015/16. The equivalent sum for 2014/15 was £11.806 million. These amounts far exceed the £8.9 million in savings which the council has been forced to make in its 2017/18 budget.
Total liabilities at SBC at fair value are quoted at £359.322 in 2015/16, up from £337.273 million in the previous financial year. This includes the portfolio of loans drawn down over many years from the PWLB, an executive arm of The Treasury which lends money to local authorities.
In 2016 the average interest rate charged by PWLB was 2.55% on the loans it issued. Interest paid by SBC on the eleven LOBO loans in its collection ranged from 2.87% to 4.2%.
Borders taxpayers will have to continue funding repayment of the LOBOS until 2065. Copies of the loan agreements supplied to Ms Rogers show they varied in length from 45 to 60 years.
DRUK claims on its website: "Debt affects all of us, whether it's personal, local council or national, we are implicated in the system which makes the majority poor and powerless and keeps the one per cent in power.
"Bankers, brokers and advisers have tricked councils into taking out expensive, risky loans, endangering our essential services. Taxpayers' money is being unnecessarily wasted while the private sector is making huge profits".
SBC has arranged two recent loans from the PWLB totalling £12 million.
Details published by the agency show that on February 24th 2017 the council was advanced £8 million over 10 years at 2.05%. And on September 29th 2016 a loan of £4 million was agreed, again over 10 years at 1.49%. The reasons for the loans being taken are not specified.
The LOBO portfolio obtained by Ms Rogers is published below.
BANK SUM BORROWED CURRENT RATE FAIR VALUE YEAR
BARCLAYS £6,000,000 2.87% £10,644,275 2005
DEXIA £3,000,000 3.70% £4,923,092 2004
DEXIA £3,000,000 4.03% £4,923,092 2004
DEXIA £3,000,000 4.20% £4,923,095 2004
DEXIA £5,000,000 3.82% £7,925,583 2005
DEXIA £5,000,000 3.75% £7,805,971 2005
DEXIA £5,000,000 3.80% £7,885,250 2005
DRESDNER £4,000,000 2.95% £6,552,578 2004
DRESDNER £4,000,000 3.50% £6,552,578 2004
WEST LB £3,000,000 4.10% £5,866,924 2006
EUROHYPO £2,000,000 2.95% £3,013,545 2006
TOTALS £43,000,000 £71,015,983
Dexia Bank, a Belgian-based institution, which had to be bailed out in 2011. It is now known as Belfius Bank.
Dresdner Bank, a German fiunance house, was acquired by its rival Commerzbank in 2009. Commerzbank also owns Eurohypo. West LB is based in Dublin.
Saturday, 29 April 2017
Veil of secrecy ripped apart
DOUG COLLIE on a 'breakthrough' ruling by Scotland's Information Commissioner
Attempts by Scottish Borders Council to hide behind their own wall of silence for six years after a £80 million waste management contract went disastrously wrong have been scuppered by Scottish Information Commissioner Rosemary Agnew.
The bungling local authority, forced to abandon plans for a garbage disposal facility near Galashiels after squandering £2.4 million of taxpayers' money, has repeatedly withheld information linked to their contract with New Earth Solutions Group [NESG] on grounds of commercial confidentiality.
Freedom of Information (FOI) requests were refused amid claims by SBC that to divulge material they had considered in secret would be damaging to NESG's business and could benefit their competitors. The council even stuck to that line after NESG crashed into administration in 2016 with debts of over £50 million.
The limited information released by SBC officials and councillors who sit on a so-called FOI review group was consistently redacted with generous helpings of black ink used to obscure sensitive or embarrassing sections of the documents. It rendered the published material worthless and meaningless.
According to senior council staff the confidentiality clauses associated with the 24-year deal signed in 2011 would remain in place for at least six years after the contract ceased to exist in February 2015.
But following a nine month investigation by the Scottish Information Commissioner's (SIC) staff, the Borders local authority has been told their reasoning for confidentiality simply will not wash. The council has been instructed to provide unedited copies of the censored reports by June 12th.
Ms Agnew concludes in a 17-page decision notice just issued: "The Commissioner notes again that much of the information withheld from the five reports relates not to NESG and its technological or financial assets, but to the council's own financial or administrative matters".
A Freedom of Information campaigner who has studied Ms Agnew's report, told us: "There is now strong evidence that SBC mounted a smokescreen to cover for its mismanagement of its dealings with New Earth Solutions Group and their funding partners (New Earth Recycling & Renewables Fund) who were supposed to come up with £23 million to build the treatment plant for the Borders.
"Perhaps publication of the censored stuff will provide an indication of who was responsible for an extremely costly four-year saga which ended in failure. Having followed this story since the contract was abandoned I am amazed there has been no investigation into what went wrong. At least Ms Agnew and her staff have 'done their bit'".
The SIC decision states: "The Commissioner finds that Scottish Borders Council failed to comply with the Environmental Information (Scotland) Regulations 2004 (the EIRs) in responding to the information request.
"The Commissioner found that the council failed to comply with regulation 5 (1) of the EIRs, by failing to make available information which it later disclosed during the investigation; was not entitled to withhold information under regulation 10 (5) (e) of the EIRs; failed to comply with regulation 13 (b) and (c) of the EIRs, by failing to provide an explanation of its decision to rely on regulation 10 (5) (e) when refusing the request".
A FULL REPORT ON THE COMMISSIONER'S DECISION NOTICE TO FOLLOW
Attempts by Scottish Borders Council to hide behind their own wall of silence for six years after a £80 million waste management contract went disastrously wrong have been scuppered by Scottish Information Commissioner Rosemary Agnew.
The bungling local authority, forced to abandon plans for a garbage disposal facility near Galashiels after squandering £2.4 million of taxpayers' money, has repeatedly withheld information linked to their contract with New Earth Solutions Group [NESG] on grounds of commercial confidentiality.
Freedom of Information (FOI) requests were refused amid claims by SBC that to divulge material they had considered in secret would be damaging to NESG's business and could benefit their competitors. The council even stuck to that line after NESG crashed into administration in 2016 with debts of over £50 million.
The limited information released by SBC officials and councillors who sit on a so-called FOI review group was consistently redacted with generous helpings of black ink used to obscure sensitive or embarrassing sections of the documents. It rendered the published material worthless and meaningless.
According to senior council staff the confidentiality clauses associated with the 24-year deal signed in 2011 would remain in place for at least six years after the contract ceased to exist in February 2015.
But following a nine month investigation by the Scottish Information Commissioner's (SIC) staff, the Borders local authority has been told their reasoning for confidentiality simply will not wash. The council has been instructed to provide unedited copies of the censored reports by June 12th.
Ms Agnew concludes in a 17-page decision notice just issued: "The Commissioner notes again that much of the information withheld from the five reports relates not to NESG and its technological or financial assets, but to the council's own financial or administrative matters".
A Freedom of Information campaigner who has studied Ms Agnew's report, told us: "There is now strong evidence that SBC mounted a smokescreen to cover for its mismanagement of its dealings with New Earth Solutions Group and their funding partners (New Earth Recycling & Renewables Fund) who were supposed to come up with £23 million to build the treatment plant for the Borders.
"Perhaps publication of the censored stuff will provide an indication of who was responsible for an extremely costly four-year saga which ended in failure. Having followed this story since the contract was abandoned I am amazed there has been no investigation into what went wrong. At least Ms Agnew and her staff have 'done their bit'".
The SIC decision states: "The Commissioner finds that Scottish Borders Council failed to comply with the Environmental Information (Scotland) Regulations 2004 (the EIRs) in responding to the information request.
"The Commissioner found that the council failed to comply with regulation 5 (1) of the EIRs, by failing to make available information which it later disclosed during the investigation; was not entitled to withhold information under regulation 10 (5) (e) of the EIRs; failed to comply with regulation 13 (b) and (c) of the EIRs, by failing to provide an explanation of its decision to rely on regulation 10 (5) (e) when refusing the request".
A FULL REPORT ON THE COMMISSIONER'S DECISION NOTICE TO FOLLOW
Thursday, 27 April 2017
Mystery surrounds bamboo plantations
EWAN LAMB concludes our trilogy on investors' lost millions
The liquidator of the bankrupt Eco Resources Fund, which has cost shareholders and creditors in faraway bamboo plantations many millions of pounds, has been told the US finance company which now owns the forests may be willing to sell the assets back to ERF for $10 million.
Unfortunately the Isle of Man-based fund has only £12,555 in its coffers, and according to liquidator Gordon Wilson no-one "will be likely to invest or lend $10 million to the fund in current circumstances".
Meanwhile, a report compiled by Mr Wilson suggests confusion reigns over who actually owns the plantations in Nicaragua and South Africa, which are part of an extremely complicated business set-up.
The Eco Fund was part of the Premier Group (Isle of Man) Ltd.'s empire which also included the worthless New Earth Recycling & Renewables [Infrastructure] Fund or NERR.
The NERR organisation, now also under investigation by a different team of insolvency experts, was meant to bankroll a £23 million waste treatment facility for the Scottish Borders before the deal was abandoned in 2015, leaving the local council's strategy for garbage disposal in complete disarray.
Details of a meeting involving Mr Wilson and American businessman Troy Wiseman, founder of EcoPlanet Bamboo, which operates the plantations, have been made public for the first time. Mr Wiseman had also been an investor in Sustainable Asset Lending (SAL), believed to be the current owners of the bamboo real estate. Premier directors John Bourbon and Jamie Sutton were also present.
The report from Mr Wilson to investors, shareholders and creditors says: "Mr Wiseman opened the meeting by saying that he was attending as an inverstor in the fund and that he had no remaining executive role in or control over SAL. This was disappointing as we had believed that Mr Wiseman had control over SAL and it was on that understanding that we agreed to meet.
"For the avoidance of doubt, we still believe (based on our assessment of his conduct) that Mr Wiseman is involved with SAL as an investor and as either a controller or manager or influencer. Mr Wiseman then informed us that SAL had foreclosed on the plantation companies' loans and that he had seen stock certificates in the plantation companies in SAL's name".
Mr Wiseman was then asked to provide evidence that the foreclosure had occurred, details as to who had done what, who knew what and when this all happened. "He agreed to provide these details and Mr Sutton has been following that up under our supervision.
"We don't believe that Eco Bamboo Isle of Man or ERF ever gave permission to the plantation companies to include their shares as security for the SAL debts. This could prove to be a pivotal point if the fund is to retain or regain any interest in these plantations going forward".
Since the meeting with Mr Wiseman in January, no information has been forthcoming from him or from SAL to demonstrate or explain what has happened to the plantations or shares in the various companies, wrote Mr Wilson.
"However, on a number of occasions since then, Mr Wiseman has indicated that SAL may be willing to sell the fund its plantations back for $10 million. Mr Wiseman knows all too well that the fund does not have $10 million. It is likely that as liquidator we will formally ask Mr Wiseman to provide evidence in order that we might better explain to you all what has happened".
The report warns there are insufficient remaining liquid funds in the structure to pay for the cost of liquidation and "there are more than ample grounds to doubt that there will ever be any recovery from the bamboo plantations. We think it is unlikely that there will be any return on investment for investors or any dividend for creditors".
The Isle of Man public purse will cover reasonable liquidation costs including costs to investigate and if necessary take action against those who may be accountable for the failure of the fund, said Mr Wilson.
The liquidator of the bankrupt Eco Resources Fund, which has cost shareholders and creditors in faraway bamboo plantations many millions of pounds, has been told the US finance company which now owns the forests may be willing to sell the assets back to ERF for $10 million.
Unfortunately the Isle of Man-based fund has only £12,555 in its coffers, and according to liquidator Gordon Wilson no-one "will be likely to invest or lend $10 million to the fund in current circumstances".
Meanwhile, a report compiled by Mr Wilson suggests confusion reigns over who actually owns the plantations in Nicaragua and South Africa, which are part of an extremely complicated business set-up.
The Eco Fund was part of the Premier Group (Isle of Man) Ltd.'s empire which also included the worthless New Earth Recycling & Renewables [Infrastructure] Fund or NERR.
The NERR organisation, now also under investigation by a different team of insolvency experts, was meant to bankroll a £23 million waste treatment facility for the Scottish Borders before the deal was abandoned in 2015, leaving the local council's strategy for garbage disposal in complete disarray.
Details of a meeting involving Mr Wilson and American businessman Troy Wiseman, founder of EcoPlanet Bamboo, which operates the plantations, have been made public for the first time. Mr Wiseman had also been an investor in Sustainable Asset Lending (SAL), believed to be the current owners of the bamboo real estate. Premier directors John Bourbon and Jamie Sutton were also present.
The report from Mr Wilson to investors, shareholders and creditors says: "Mr Wiseman opened the meeting by saying that he was attending as an inverstor in the fund and that he had no remaining executive role in or control over SAL. This was disappointing as we had believed that Mr Wiseman had control over SAL and it was on that understanding that we agreed to meet.
"For the avoidance of doubt, we still believe (based on our assessment of his conduct) that Mr Wiseman is involved with SAL as an investor and as either a controller or manager or influencer. Mr Wiseman then informed us that SAL had foreclosed on the plantation companies' loans and that he had seen stock certificates in the plantation companies in SAL's name".
Mr Wiseman was then asked to provide evidence that the foreclosure had occurred, details as to who had done what, who knew what and when this all happened. "He agreed to provide these details and Mr Sutton has been following that up under our supervision.
"We don't believe that Eco Bamboo Isle of Man or ERF ever gave permission to the plantation companies to include their shares as security for the SAL debts. This could prove to be a pivotal point if the fund is to retain or regain any interest in these plantations going forward".
Since the meeting with Mr Wiseman in January, no information has been forthcoming from him or from SAL to demonstrate or explain what has happened to the plantations or shares in the various companies, wrote Mr Wilson.
"However, on a number of occasions since then, Mr Wiseman has indicated that SAL may be willing to sell the fund its plantations back for $10 million. Mr Wiseman knows all too well that the fund does not have $10 million. It is likely that as liquidator we will formally ask Mr Wiseman to provide evidence in order that we might better explain to you all what has happened".
The report warns there are insufficient remaining liquid funds in the structure to pay for the cost of liquidation and "there are more than ample grounds to doubt that there will ever be any recovery from the bamboo plantations. We think it is unlikely that there will be any return on investment for investors or any dividend for creditors".
The Isle of Man public purse will cover reasonable liquidation costs including costs to investigate and if necessary take action against those who may be accountable for the failure of the fund, said Mr Wilson.
Monday, 24 April 2017
Beyond the Bamboo Curtain - (Part Two)
DOUGLAS SHEPHERD with the second chapter on the great Eco Resources failure
A damning report from the provisional liquidator of the Premier Eco Resources Fund [ERF] gives details of the complicated structures and flawed decisions which led to the collapse of the company, leaving investors, shareholders and creditors out of pocket by many millions of dollars.
In part one of the story we revealed the problems directly associated with a vote taken in December not to liquidate the ERF, which claimed to be investing in bamboo plantations in Nicaragua and South Africa, and the insolvency expert's assertion that the result may not have been legitimate.
But the liquidation process is underway after an Isle of Man judge rejected arguments that the fund should not be dissolved.
ERF has close associations with another Premier Group business, New Earth Recycling & Renewables [Infrastructure] Fund [NERR] which will be familiar to taxpayers in the Scottish Borders. NERR is also in the hands of liquidators who are investigating the reasons for its costly collapse.
Gordon Wilson, the ERF liquidator says: "Whilst we have not as yet made a final determination of the reasons for the fund's failure, mainly because there are still some fundamental uncertainties about exactly what has occurred, we have reached some preliminary findings and conclusions.
"In our first report as controller in August 2016 we said 'it is apparent to us that the three principal companies involved have been in difficulties for well over a year. They are all, in our considered view, insolvent and most likely have been insolvent for some time'.
"The financial difficulties can, in our view, be directly attributed to the decisions taken early in the life of this structure, in particular to give special redemption terms to the shareholder vehicles linked to Mr [Troy] Wiseman which saw them redeem over half their shares in cash".
Mr Wiseman, an American businessman and entrepreneur, is the main figure in the EcoPlanet Bamboo Group set-up which manages the plantations.
The report goes on: "In addition, the financial difficulties were compounded by an apparent under-regard for the longer term financial consequences on the investment strategy of paying that redemption cash out of the structure".
There is also evidence that the later acquisitions of plantations in late 2013 were intended to bulk up the assets of the fund so that it would be of a size which would attract more new investors "with apparent under-regard for the related risks and cash flow needs of the additional assets.
"The result for the majority of those 180 or so people who subscribed cash is that they now have an investment which, if it ever pays them any cash back, will be unlikely to do so until the mid-2020s. Overall we feel that the investors have been significantly let down".
Mr Wilson's report concludes that the fund's failure was principally due to:
*A collective failure to objectively manage the plantation assets due to a combination of over reliance on Eco Bamboo Group and Mr Wiseman, to Mr Wiseman's degree of control over Eco Bamboo Isle of Man and failures to avoid conflicts of interest.
*An overly complex structure with a catastrophic mismatch between liquidity terms offered to investors versus the liquidity associated with the underlying asset class.
*Restrictions on information flows and their subsequent impact on objective decision making.
*Financial mismanagement, in particular the consequences of the redemptions paid to Eco Bamboo Group.
"These failures were then compounded by Mr [Michael] Richardson (a director of Premier Group Isle of Man, now in liquidation) and Mr Wiseman becoming personally invested in SAL (Sustainable Asset Lending, a US-based finance company which, appears to own the plantations) and the resultant conflict of interest which that caused them both".
FURTHER COVERAGE OF THE SAGA TO FOLLOW....
A damning report from the provisional liquidator of the Premier Eco Resources Fund [ERF] gives details of the complicated structures and flawed decisions which led to the collapse of the company, leaving investors, shareholders and creditors out of pocket by many millions of dollars.
In part one of the story we revealed the problems directly associated with a vote taken in December not to liquidate the ERF, which claimed to be investing in bamboo plantations in Nicaragua and South Africa, and the insolvency expert's assertion that the result may not have been legitimate.
But the liquidation process is underway after an Isle of Man judge rejected arguments that the fund should not be dissolved.
ERF has close associations with another Premier Group business, New Earth Recycling & Renewables [Infrastructure] Fund [NERR] which will be familiar to taxpayers in the Scottish Borders. NERR is also in the hands of liquidators who are investigating the reasons for its costly collapse.
Gordon Wilson, the ERF liquidator says: "Whilst we have not as yet made a final determination of the reasons for the fund's failure, mainly because there are still some fundamental uncertainties about exactly what has occurred, we have reached some preliminary findings and conclusions.
"In our first report as controller in August 2016 we said 'it is apparent to us that the three principal companies involved have been in difficulties for well over a year. They are all, in our considered view, insolvent and most likely have been insolvent for some time'.
"The financial difficulties can, in our view, be directly attributed to the decisions taken early in the life of this structure, in particular to give special redemption terms to the shareholder vehicles linked to Mr [Troy] Wiseman which saw them redeem over half their shares in cash".
Mr Wiseman, an American businessman and entrepreneur, is the main figure in the EcoPlanet Bamboo Group set-up which manages the plantations.
The report goes on: "In addition, the financial difficulties were compounded by an apparent under-regard for the longer term financial consequences on the investment strategy of paying that redemption cash out of the structure".
There is also evidence that the later acquisitions of plantations in late 2013 were intended to bulk up the assets of the fund so that it would be of a size which would attract more new investors "with apparent under-regard for the related risks and cash flow needs of the additional assets.
"The result for the majority of those 180 or so people who subscribed cash is that they now have an investment which, if it ever pays them any cash back, will be unlikely to do so until the mid-2020s. Overall we feel that the investors have been significantly let down".
Mr Wilson's report concludes that the fund's failure was principally due to:
*A collective failure to objectively manage the plantation assets due to a combination of over reliance on Eco Bamboo Group and Mr Wiseman, to Mr Wiseman's degree of control over Eco Bamboo Isle of Man and failures to avoid conflicts of interest.
*An overly complex structure with a catastrophic mismatch between liquidity terms offered to investors versus the liquidity associated with the underlying asset class.
*Restrictions on information flows and their subsequent impact on objective decision making.
*Financial mismanagement, in particular the consequences of the redemptions paid to Eco Bamboo Group.
"These failures were then compounded by Mr [Michael] Richardson (a director of Premier Group Isle of Man, now in liquidation) and Mr Wiseman becoming personally invested in SAL (Sustainable Asset Lending, a US-based finance company which, appears to own the plantations) and the resultant conflict of interest which that caused them both".
FURTHER COVERAGE OF THE SAGA TO FOLLOW....
Saturday, 22 April 2017
Shady goings-on in the bamboo plantations!
DOUGLAS SHEPHERD reports
One of two bankrupt investment funds whose bosses were involved in a disastrous waste management contract in the Scottish Borders, is now mired in allegations of mismanagement, potentially disturbing conflicts of interest, and stands accused of "significantly letting down investors".
A hard-hitting report from the provisional liquidator of the Isle of Man-based Eco Resources Fund (ERF), which collapsed last year with debts estimated at £2.8 million and which left shareholders with nothing, includes new information concerning the demise of the ERF which 'invested' in bamboo plantations in Nicaragua and South Africa.
A similar investigation - said to be extremely complex - is continuing into the affairs of the equally bankrupt New Earth Recycling & Renewables [Infrastructure] fund (NERR) which also recorded financial deficits running into millions of pounds.
Both funds were managed and controlled by Premier Group (IOM) Ltd.,which also happens to have gone 'belly-up'. Full reasons for NERR's failure are not expected to emerge before September at the earliest. This was the investment vehicle which was meant to fund a £21 million waste management facility for Scottish Borders Council, and the failure to deliver the project left local taxpayers with a bill of at least £2.4 million.
Meanwhile, back in "bamboo-land" the ERF, like NERR, cannot even afford to pay for its own liquidation. The fees of the insolvency specialists now probing the useless fund will be met by the Manx Financial Services Authority. Some creditors, investors and shareholders believe there should be a criminal investigation into the running of the two funds.
So far as ERF is concerned, liquidator Gordon Wilson - he was previously an adviser to the fund - has already submitted a number of confidential reports to the authorities, and extracts from those documents have now been made public.
Mr Wilson explains: "We submitted a preliminary report as adviser in July 2016. In short, we reported that the fund was at the top of a complex structure, arguably an overly complex structure, the entirety of which had been in financial difficulties for some time. We concluded that it was desirable, and seemingly in the interests of all concerned, to undertake a restructure."
At that juncture Mr Wilson's appointment was upgraded to controller of the fund with the aim of putting the new structure in place along the lines of his suggestion by negotiating with all of those who had an apparent financial interest in the underlying assets.
However, the report reveals: "That was not possible for a variety of reasons and having concluded we could not, as controller, materially improve the situation for the fund's investors, we reported our findings to the authority in August 2016. Our controller position was then terminated and we were re-appointed adviser. Control of the fund passed back to the board."
Three months later ERF's directors reached the conclusion that the fund could no longer continue "by reason of an excess of liabilities over assets",
Mr Wilson reports on a meeting of the fund's investors in December at which a resolution for Eco's liquidation was put to a vote. The resolution failed because a majority of investors who voted were against liquidation.
The liquidation report states: "There are around 33.7 million Eco shares in issue and votes were received from holders of 16.8 million of them; i.e. around 50% of investors voted. That was enough to make the meeting quorate. However, we feel that it is nonetheless significant that half of the investors in the fund did not vote.
Of the 14.6 million votes against liquidation, 9.577 million were associated with Troy Wiseman's Eco Bamboo Group. Mr Wiseman, described as an American entrepreneur, runs the businesses which manage the bamboo plantations.
A further 1.41 million votes were associated with an individual named Paul Feldman. Mr Wilson explains that both men are associated with a US company called Sustainable Asset Lending (SAL) which is understood to effectively own the plantation assets after making finance available.
"Of the 3.16 million ex Wiseman/Feldman votes against [liquidation], some 2.736 million were from one shareholder, a Mauritius-based insurance company", says the report. "We have recently spoken to that investor who explained to us that they had not apparently seen the investor communications nor had they any appreciation of the fund's financial difficulties.
"Rather they had approached Mr Wiseman who had shared a 'favourable financial projection' with them. On that basis, they voted against liquidation thinking a better outcome would be achieved. It is therefore apparent that the votes cast by and the related actions of Messrs Feldman and Wiseman, two individuals with a vested interest in SAL (therefore an arguable vested interest in the fund not succeeding in any action against SAL) have significantly swayed the liquidation vote.
"We believe that this calls into question the legitimacy of the vote outcome as a proxy for the views of the wider investor group".
MORE ON THIS STORY TO FOLLOW....
Meanwhile you can read a comprehensive analysis of the trials and tribulations of ERF and the Eco Bamboo 'empire' on the Redd Monitor website at http://www.redd-monitor.org/
One of two bankrupt investment funds whose bosses were involved in a disastrous waste management contract in the Scottish Borders, is now mired in allegations of mismanagement, potentially disturbing conflicts of interest, and stands accused of "significantly letting down investors".
A hard-hitting report from the provisional liquidator of the Isle of Man-based Eco Resources Fund (ERF), which collapsed last year with debts estimated at £2.8 million and which left shareholders with nothing, includes new information concerning the demise of the ERF which 'invested' in bamboo plantations in Nicaragua and South Africa.
A similar investigation - said to be extremely complex - is continuing into the affairs of the equally bankrupt New Earth Recycling & Renewables [Infrastructure] fund (NERR) which also recorded financial deficits running into millions of pounds.
Both funds were managed and controlled by Premier Group (IOM) Ltd.,which also happens to have gone 'belly-up'. Full reasons for NERR's failure are not expected to emerge before September at the earliest. This was the investment vehicle which was meant to fund a £21 million waste management facility for Scottish Borders Council, and the failure to deliver the project left local taxpayers with a bill of at least £2.4 million.
Meanwhile, back in "bamboo-land" the ERF, like NERR, cannot even afford to pay for its own liquidation. The fees of the insolvency specialists now probing the useless fund will be met by the Manx Financial Services Authority. Some creditors, investors and shareholders believe there should be a criminal investigation into the running of the two funds.
So far as ERF is concerned, liquidator Gordon Wilson - he was previously an adviser to the fund - has already submitted a number of confidential reports to the authorities, and extracts from those documents have now been made public.
Mr Wilson explains: "We submitted a preliminary report as adviser in July 2016. In short, we reported that the fund was at the top of a complex structure, arguably an overly complex structure, the entirety of which had been in financial difficulties for some time. We concluded that it was desirable, and seemingly in the interests of all concerned, to undertake a restructure."
At that juncture Mr Wilson's appointment was upgraded to controller of the fund with the aim of putting the new structure in place along the lines of his suggestion by negotiating with all of those who had an apparent financial interest in the underlying assets.
However, the report reveals: "That was not possible for a variety of reasons and having concluded we could not, as controller, materially improve the situation for the fund's investors, we reported our findings to the authority in August 2016. Our controller position was then terminated and we were re-appointed adviser. Control of the fund passed back to the board."
Three months later ERF's directors reached the conclusion that the fund could no longer continue "by reason of an excess of liabilities over assets",
Mr Wilson reports on a meeting of the fund's investors in December at which a resolution for Eco's liquidation was put to a vote. The resolution failed because a majority of investors who voted were against liquidation.
The liquidation report states: "There are around 33.7 million Eco shares in issue and votes were received from holders of 16.8 million of them; i.e. around 50% of investors voted. That was enough to make the meeting quorate. However, we feel that it is nonetheless significant that half of the investors in the fund did not vote.
Of the 14.6 million votes against liquidation, 9.577 million were associated with Troy Wiseman's Eco Bamboo Group. Mr Wiseman, described as an American entrepreneur, runs the businesses which manage the bamboo plantations.
A further 1.41 million votes were associated with an individual named Paul Feldman. Mr Wilson explains that both men are associated with a US company called Sustainable Asset Lending (SAL) which is understood to effectively own the plantation assets after making finance available.
"Of the 3.16 million ex Wiseman/Feldman votes against [liquidation], some 2.736 million were from one shareholder, a Mauritius-based insurance company", says the report. "We have recently spoken to that investor who explained to us that they had not apparently seen the investor communications nor had they any appreciation of the fund's financial difficulties.
"Rather they had approached Mr Wiseman who had shared a 'favourable financial projection' with them. On that basis, they voted against liquidation thinking a better outcome would be achieved. It is therefore apparent that the votes cast by and the related actions of Messrs Feldman and Wiseman, two individuals with a vested interest in SAL (therefore an arguable vested interest in the fund not succeeding in any action against SAL) have significantly swayed the liquidation vote.
"We believe that this calls into question the legitimacy of the vote outcome as a proxy for the views of the wider investor group".
MORE ON THIS STORY TO FOLLOW....
Meanwhile you can read a comprehensive analysis of the trials and tribulations of ERF and the Eco Bamboo 'empire' on the Redd Monitor website at http://www.redd-monitor.org/
Wednesday, 19 April 2017
May sparks Teri wrath
EXCLUSIVE by MAILY DAIL POLITICAL STAFF
There was outrage in the Scottish Borders burgh of Hawick last night after UK Premier Theresa May announced there was to be a General Election during the town's Common Riding week.
For the uninitiated, Hawick Common Riding - dubbed Hogmanay on Horseback by non-followers - is the most important date on the local calendar. The centuries old commemorations, traditions and celebrations preserve the 'Aye Been' attitude of many Teries, the name given to residents of the town.
This latest run-in with a woman will revive bitter memories of the conflict which broke out over twenty years ago when ladies attempted to take part in the mounted ceremonials for the first time.
The would-be female participants were sworn at and spat on by fanatical supporters of the all male ride-outs which mark ancient battles and the odd skirmish with the English. It makes this unwanted interference by an English Tory PM all the more remarkable and unacceptable locally.
So keen was the Hawick Common Riding Committee to prevent the lassies from joining the cavalcades they commissioned an advocate by the name of Crispin Agnew to represent them in an infamous court case which sought to ban the women from rides to far flung places such as Mosspaul.
But the case was lost when a grumpy judge called Paterson threw out the plea, and the row was reported around the world, leaving the town with a somewhat tarnished reputation.
According to Maily Dail sources a group of unnamed hardliners are attempting to secure financial backing for a sheriff court action to have the date of the June 8 election moved "to a more suitable day". They are determined to send Mrs May homeward to Maidstone to think again.
It was difficult to persuade townspeople to be quoted on the record last night when we asked for their views on the PM's announcement. Many simply said they were seething with rage while others revealed they expected to be too drunk to vote, and they would certainly get their priorities right on The Big Day.
One elderly gentleman was prepared to speak to us although we do not know whether he gave us his correct name. He claimed there was no point in candidates or canvassers bothering to enter Hawick while the hallowed events were taking place, especially if they happened to be of the non-male gender.
Ronny Judkin told us: "That wumman May better no show her face in Hawick otherwise she's liable to get a slap. You just dinna mess wi' Teries. I'd advise her to return to the kitchen and get on wi' making Mr May's sandwiches".
It seems certain the political activists will face a struggle to achieve even a reasonable turn-out of voters with the Common Riding revelries in full swing.
One local worthy declared: "Many Hawick electors will be downing glasses of rum and milk - the traditional tipple of participants - even before the polling stations open. And by nightfall a fair proportion will be too p*ss*d to even think about drawing an X in a small box."
A Downing Street spokesman said: "Where is Hawick exactly? Is it somewhere north of Watford. I can't imagine that nice Mrs May causing outrage anywhere".
We were then advised to contact Scottish Tory leader Ruth ("The Truth") Davidson for further comment. Unfortunately Ms Davidson could not be contacted. We were informed she was closeted with her legal team preparing a court action to head off something called INDYREF TWO.
The forthcoming clash between the 2017 General Election and the Hawick Common Riding chase and colour bussing had not yet appeared on her somewhat blinkered radar.
There was outrage in the Scottish Borders burgh of Hawick last night after UK Premier Theresa May announced there was to be a General Election during the town's Common Riding week.
For the uninitiated, Hawick Common Riding - dubbed Hogmanay on Horseback by non-followers - is the most important date on the local calendar. The centuries old commemorations, traditions and celebrations preserve the 'Aye Been' attitude of many Teries, the name given to residents of the town.
This latest run-in with a woman will revive bitter memories of the conflict which broke out over twenty years ago when ladies attempted to take part in the mounted ceremonials for the first time.
The would-be female participants were sworn at and spat on by fanatical supporters of the all male ride-outs which mark ancient battles and the odd skirmish with the English. It makes this unwanted interference by an English Tory PM all the more remarkable and unacceptable locally.
So keen was the Hawick Common Riding Committee to prevent the lassies from joining the cavalcades they commissioned an advocate by the name of Crispin Agnew to represent them in an infamous court case which sought to ban the women from rides to far flung places such as Mosspaul.
But the case was lost when a grumpy judge called Paterson threw out the plea, and the row was reported around the world, leaving the town with a somewhat tarnished reputation.
According to Maily Dail sources a group of unnamed hardliners are attempting to secure financial backing for a sheriff court action to have the date of the June 8 election moved "to a more suitable day". They are determined to send Mrs May homeward to Maidstone to think again.
It was difficult to persuade townspeople to be quoted on the record last night when we asked for their views on the PM's announcement. Many simply said they were seething with rage while others revealed they expected to be too drunk to vote, and they would certainly get their priorities right on The Big Day.
One elderly gentleman was prepared to speak to us although we do not know whether he gave us his correct name. He claimed there was no point in candidates or canvassers bothering to enter Hawick while the hallowed events were taking place, especially if they happened to be of the non-male gender.
Ronny Judkin told us: "That wumman May better no show her face in Hawick otherwise she's liable to get a slap. You just dinna mess wi' Teries. I'd advise her to return to the kitchen and get on wi' making Mr May's sandwiches".
It seems certain the political activists will face a struggle to achieve even a reasonable turn-out of voters with the Common Riding revelries in full swing.
One local worthy declared: "Many Hawick electors will be downing glasses of rum and milk - the traditional tipple of participants - even before the polling stations open. And by nightfall a fair proportion will be too p*ss*d to even think about drawing an X in a small box."
A Downing Street spokesman said: "Where is Hawick exactly? Is it somewhere north of Watford. I can't imagine that nice Mrs May causing outrage anywhere".
We were then advised to contact Scottish Tory leader Ruth ("The Truth") Davidson for further comment. Unfortunately Ms Davidson could not be contacted. We were informed she was closeted with her legal team preparing a court action to head off something called INDYREF TWO.
The forthcoming clash between the 2017 General Election and the Hawick Common Riding chase and colour bussing had not yet appeared on her somewhat blinkered radar.
Tuesday, 18 April 2017
Council prepares to award itself planning permission!
by DOUG COLLIE
Proposals by Scottish Borders Council to develop a £6 million waste transfer station [WTS] on contaminated land at the outskirts of Galashiels seems certain to win approval despite the concerns of local residents who claim their lives will be ruined by scores of lorry movements on a C class road, and from odour, noise and emissions.
In effect the council's own planning authority is set to sanction measures submitted by another department within the same local authority as SBC pursues yet another strategy in a bid to solve its urgent waste disposal issues.
The waste transfer station will be used to store thousands of tonnes of garbage from Borders households until it can be transported by road to a destination outwith the region for treatment.
But the project would not have been required if local councillors and officials had not signed a useless £80 million contract with a firm of dud waste treatment 'specialists'. The partnership with New Earth Solutions collapsed in spectacular fashion in 2015 resulting in the abandonment of plans for a "state-of-the-art facility" on the site which will now accommodate the WTS.
Despite being labelled a major development, SBC appears to be able to process and decide on their own WTS application without it being called in for ministerial consideration at Scottish Government level. No doubt opponents will cry foul, but there is nothing they can do to prevent the scheme proceeding now if councillors nod it through.
The recommendation to approve the WTS - with conditions - has been made in a 20-page report from planning officers which has been published on the authority's website.
Four individual households and a local residents' association have lodged strong objections, citing a string of reasons for their opposition. These include:
*It is an unsuitable site on contaminated land.
*Extra volumes of lorries, including articulated trucks using the C77 route will bring traffic chaos and increase the likelihood of serious accidents.
*The council's transport assessment is one-sided in favour of planning permission being granted.
*There are concerns with the content and accuracy of documentation provided in support of the WTS with allegations of apparent omissions and alterations to predicted traffic flow figures since a public consultation last autumn..
*The conclusion by council officials that odour emissions will not be significant is not based on fact.
*Concerns regarding drainage provision and polluted leachate.
However, all of these issues are dismissed in the report from planning officers.
The document says: "In this case the development would principally involve storage and transfer of waste within a single building, with external works generally comprising access, parking, staff and ancillary infrastructure. It would be sited within the area of the well-established waste management site, using the same road infrastructure. It is not within an ecologically sensitive area or designated landscape.
"Though there are residential areas nearby, including the emerging development to the south, these are not directly adjacent. Ultimately, accounting for the existing land uses within the site and surrounding area; the existing landfill activity; the purpose and scale of the development; and the type of environmental impacts likely to arise, it was not considered that significant effects on the environment would occur such that these would need examined by way of EIA (Environmental Impact Assessment)."
On the traffic front, the council claims the WTS will only generate six extra vehicle movements per day, taking the total to 88. This statistic is hotly disputed by objectors, but the report states: "This increase in traffic is not considered to be significant".
Proposals by Scottish Borders Council to develop a £6 million waste transfer station [WTS] on contaminated land at the outskirts of Galashiels seems certain to win approval despite the concerns of local residents who claim their lives will be ruined by scores of lorry movements on a C class road, and from odour, noise and emissions.
In effect the council's own planning authority is set to sanction measures submitted by another department within the same local authority as SBC pursues yet another strategy in a bid to solve its urgent waste disposal issues.
The waste transfer station will be used to store thousands of tonnes of garbage from Borders households until it can be transported by road to a destination outwith the region for treatment.
But the project would not have been required if local councillors and officials had not signed a useless £80 million contract with a firm of dud waste treatment 'specialists'. The partnership with New Earth Solutions collapsed in spectacular fashion in 2015 resulting in the abandonment of plans for a "state-of-the-art facility" on the site which will now accommodate the WTS.
Despite being labelled a major development, SBC appears to be able to process and decide on their own WTS application without it being called in for ministerial consideration at Scottish Government level. No doubt opponents will cry foul, but there is nothing they can do to prevent the scheme proceeding now if councillors nod it through.
The recommendation to approve the WTS - with conditions - has been made in a 20-page report from planning officers which has been published on the authority's website.
Four individual households and a local residents' association have lodged strong objections, citing a string of reasons for their opposition. These include:
*It is an unsuitable site on contaminated land.
*Extra volumes of lorries, including articulated trucks using the C77 route will bring traffic chaos and increase the likelihood of serious accidents.
*The council's transport assessment is one-sided in favour of planning permission being granted.
*There are concerns with the content and accuracy of documentation provided in support of the WTS with allegations of apparent omissions and alterations to predicted traffic flow figures since a public consultation last autumn..
*The conclusion by council officials that odour emissions will not be significant is not based on fact.
*Concerns regarding drainage provision and polluted leachate.
However, all of these issues are dismissed in the report from planning officers.
The document says: "In this case the development would principally involve storage and transfer of waste within a single building, with external works generally comprising access, parking, staff and ancillary infrastructure. It would be sited within the area of the well-established waste management site, using the same road infrastructure. It is not within an ecologically sensitive area or designated landscape.
"Though there are residential areas nearby, including the emerging development to the south, these are not directly adjacent. Ultimately, accounting for the existing land uses within the site and surrounding area; the existing landfill activity; the purpose and scale of the development; and the type of environmental impacts likely to arise, it was not considered that significant effects on the environment would occur such that these would need examined by way of EIA (Environmental Impact Assessment)."
On the traffic front, the council claims the WTS will only generate six extra vehicle movements per day, taking the total to 88. This statistic is hotly disputed by objectors, but the report states: "This increase in traffic is not considered to be significant".
Tuesday, 11 April 2017
Loss-making Great Tapestry heading for Borders
EWAN LAMB reports
The publication of a new set of accounts for The Great Scottish Tapestry charitable trust may reignite critics' doubts over the economic viability of a £6 million scheme to house the visitor attraction in Galashiels.
It has been revealed that both the trust and its associated trading company registered financial deficits in 2015/16 after results were posted on the website of the Scottish Charities Register and at Companies House respectively.
The figures may well be used to raise fresh concerns over the future commercial success of the planned tapestry museum to be funded jointly by Scottish Borders Council and the Scottish Government. The intention is to convert disused buildings in Galashiels town centre after proposals for a custom-built centre to accommodate the tapestry panels at Tweedbank were shown to be unworkable.
According to the trust's accounts, published by the charities regulator for the first time, income of £96,667 fell well short of expenditure (£114,669), resulting in an annual loss of £18,000.
In the previous 12-month period The Great Scottish Tapestry collected £89,156 and spent just £46,726. The 11-page document detailing the accounts claims last year's loss was mainly due to the payment of invoices from the previous financial year.
The net result is that the charity's reserves have fallen from £55,523 in 2015 to £37,521 last year.
It is disclosed in the report that the tapestry will not be exhibited anywhere between now and the completion of the Borders project which has yet to go out to tender. The delivery of the new museum could take several years.
Under the heading Achievements and Performance, the trustees state: "Having been created the tapestry has been on a series of exhibitions in whole or in part round Scotland to be displayed to the people of Scotland.
"In tandem with this much educational outreach work has been undertaken and a series of publications and other merchandise created. The Tapestry will shortly go into store in preparation for a move to a permanent home in the Borders."
It appears more than 27 per cent of expenditure incurred last year was accounted for by "Border Council costs" of £31,788. There is no explanation in the report of what those costs were although the local authority has already spent a significant sum on the aborted Tweedbank proposal, and on feasibility studies by consultants.
The charity has also made a loan of £24,388 to Tapestry Trading (Scotland) Ltd., whose three directors are also trustees of the charity. The exact relationship between the charity and the limited company has not been publicly explained.
Tapestry Trading, founded in 2013, saw its assets fall dramatically from £15,719 in 2015 to £7,691 in 2016. The company's accounts show that with amounts due to creditors within one year standing at £24,271, the business has liabilities of £16,580.
Scottish Borders Council's highly controversial decision to give a home to the tapestry panels, and to earmark around £2.5 million for the concept, has met with a strong mixture of opposition and support. Opponents have argued that the project will turn out to be an expensive white elephant for taxpayers and will be unable to attract sufficient numbers of people to make it pay.
But backers, including many individuals who stitched the panels depicting Scotland through the ages, claim the Galashiels centre will provide a major visitor attraction in association with the Borders Railway which will bring significant new trade for local shops and businesses in the tourist sector.
The publication of a new set of accounts for The Great Scottish Tapestry charitable trust may reignite critics' doubts over the economic viability of a £6 million scheme to house the visitor attraction in Galashiels.
It has been revealed that both the trust and its associated trading company registered financial deficits in 2015/16 after results were posted on the website of the Scottish Charities Register and at Companies House respectively.
The figures may well be used to raise fresh concerns over the future commercial success of the planned tapestry museum to be funded jointly by Scottish Borders Council and the Scottish Government. The intention is to convert disused buildings in Galashiels town centre after proposals for a custom-built centre to accommodate the tapestry panels at Tweedbank were shown to be unworkable.
According to the trust's accounts, published by the charities regulator for the first time, income of £96,667 fell well short of expenditure (£114,669), resulting in an annual loss of £18,000.
In the previous 12-month period The Great Scottish Tapestry collected £89,156 and spent just £46,726. The 11-page document detailing the accounts claims last year's loss was mainly due to the payment of invoices from the previous financial year.
The net result is that the charity's reserves have fallen from £55,523 in 2015 to £37,521 last year.
It is disclosed in the report that the tapestry will not be exhibited anywhere between now and the completion of the Borders project which has yet to go out to tender. The delivery of the new museum could take several years.
Under the heading Achievements and Performance, the trustees state: "Having been created the tapestry has been on a series of exhibitions in whole or in part round Scotland to be displayed to the people of Scotland.
"In tandem with this much educational outreach work has been undertaken and a series of publications and other merchandise created. The Tapestry will shortly go into store in preparation for a move to a permanent home in the Borders."
It appears more than 27 per cent of expenditure incurred last year was accounted for by "Border Council costs" of £31,788. There is no explanation in the report of what those costs were although the local authority has already spent a significant sum on the aborted Tweedbank proposal, and on feasibility studies by consultants.
The charity has also made a loan of £24,388 to Tapestry Trading (Scotland) Ltd., whose three directors are also trustees of the charity. The exact relationship between the charity and the limited company has not been publicly explained.
Tapestry Trading, founded in 2013, saw its assets fall dramatically from £15,719 in 2015 to £7,691 in 2016. The company's accounts show that with amounts due to creditors within one year standing at £24,271, the business has liabilities of £16,580.
Scottish Borders Council's highly controversial decision to give a home to the tapestry panels, and to earmark around £2.5 million for the concept, has met with a strong mixture of opposition and support. Opponents have argued that the project will turn out to be an expensive white elephant for taxpayers and will be unable to attract sufficient numbers of people to make it pay.
But backers, including many individuals who stitched the panels depicting Scotland through the ages, claim the Galashiels centre will provide a major visitor attraction in association with the Borders Railway which will bring significant new trade for local shops and businesses in the tourist sector.
Thursday, 6 April 2017
Council's chosen fund can't even afford insolvency!
EXCLUSIVE by DOUG COLLIE
The bankrupt investment fund chosen by Borders councillors to bankroll a £21 million waste management project does not even have enough money to pay the liquidators who are investigating the activities and conduct of its managers, it has been revealed.
New Earth Recycling & Renewables [Infrastructure] Plc (NERR) was supposed to have been subjected to rigorous financial screening by Scottish Borders Council and its expensive advisers during the planning of a "state-of-the-art" biological and incineration plant as part of a £80 million contract signed with Dorset-based New Earth Solutions (NES) in 2011/12.
As Not Just Sheep & Rugby has pointed out, many of the elected members of Scottish Borders Council (SBC) who will be seeking re-election next month, sanctioned the useless deal which collapsed in disarray in 2015 after costing council taxpayers £2.4 million.
The local authority has repeatedly refused to divulge information about their dealings with NES and its Isle of Man investment "branch" NERR, citing commercial confidentiality even though all of the businesses involved in the useless contract are now insolvent with debts running into hundreds of millions of pounds.
Various firms of experts in the art of liquidation and administration have warned shareholders and investors in NES, NERR and the controlling Premier Group (Isle of Man) which has also gone belly-up that they are unlikely to get much if any of their money back. The NES dividend is forecast at between four and eight pence in the pound.
In an update on the "complex" winding up of NERR issued this week, Alex Adam, the fund's joint liquidator has told creditors that "due to the lack of readily available assets in the liquidation estate, the Isle of Man Financial Services Authority is providing funding by way of a loan to the joint liquidators to meet the costs of the liquidation".
Yet this is the fund which managed to string SBC along from 2011 to 2015, promising to pay for the waste management facility at Easter Langlee, Galashiels. NERR's controllers and promoters coined in lucrative 'management' fees while the investment entity did nothing to progress the Borders project.
The latest progress report from Mr Adam states: "As you are aware, this is a complex matter requiring information to be obtained from a variety of sources relating to a period of several years.
"Since our last update we have focussed on identifying specific issues which warrant further investigation with the objective of determining whether a claim could be brought against one or more third parties. Following that review and discussion with our legal advisers we are in the process of conducting a detailed assessment of one such issue.
"However, we do not wish to prejudice any potential claim by providing further detail at this stage. For the avoidance of doubt, this does not mean that other possible claims have been discounted but only that we are focussing on what we consider currently to be the issue with the greatest prospect of success, that is, cash receipts into the Company".
Mr Adam warns that the funding arrangement for the liquidation with the Manx FSA is subject to continuous review and can potentially be withdrawn at short notice.
He adds: "However, we have maintained dialogue with the FSA throughout the period with respect to the progress of and strategy for the liquidation and, for the time being, the funding arrangement remains in place to allow the investigations to continue".
Mr Adam anticipates providing a further update for investors and creditors in September.
Not Just Sheep & Rugby feels justified in asking yet again for details of due diligence and solvency checks conducted by SBC and by the firms of specialist lawyers and financial experts they commissioned before deciding NES and NERR were the answers to their environmental prayers.
Our view is that a firm which cannot even afford to pay for going bust should never have been allowed anywhere near a £80 million roast dripping with public money. It troubles us deeply that an investigation has not been held into the four-year relationship between SBC and a consortium of cash-strapped businesses incapable of delivering on promises made. Of course, it is never too late....
The bankrupt investment fund chosen by Borders councillors to bankroll a £21 million waste management project does not even have enough money to pay the liquidators who are investigating the activities and conduct of its managers, it has been revealed.
New Earth Recycling & Renewables [Infrastructure] Plc (NERR) was supposed to have been subjected to rigorous financial screening by Scottish Borders Council and its expensive advisers during the planning of a "state-of-the-art" biological and incineration plant as part of a £80 million contract signed with Dorset-based New Earth Solutions (NES) in 2011/12.
As Not Just Sheep & Rugby has pointed out, many of the elected members of Scottish Borders Council (SBC) who will be seeking re-election next month, sanctioned the useless deal which collapsed in disarray in 2015 after costing council taxpayers £2.4 million.
The local authority has repeatedly refused to divulge information about their dealings with NES and its Isle of Man investment "branch" NERR, citing commercial confidentiality even though all of the businesses involved in the useless contract are now insolvent with debts running into hundreds of millions of pounds.
Various firms of experts in the art of liquidation and administration have warned shareholders and investors in NES, NERR and the controlling Premier Group (Isle of Man) which has also gone belly-up that they are unlikely to get much if any of their money back. The NES dividend is forecast at between four and eight pence in the pound.
In an update on the "complex" winding up of NERR issued this week, Alex Adam, the fund's joint liquidator has told creditors that "due to the lack of readily available assets in the liquidation estate, the Isle of Man Financial Services Authority is providing funding by way of a loan to the joint liquidators to meet the costs of the liquidation".
Yet this is the fund which managed to string SBC along from 2011 to 2015, promising to pay for the waste management facility at Easter Langlee, Galashiels. NERR's controllers and promoters coined in lucrative 'management' fees while the investment entity did nothing to progress the Borders project.
The latest progress report from Mr Adam states: "As you are aware, this is a complex matter requiring information to be obtained from a variety of sources relating to a period of several years.
"Since our last update we have focussed on identifying specific issues which warrant further investigation with the objective of determining whether a claim could be brought against one or more third parties. Following that review and discussion with our legal advisers we are in the process of conducting a detailed assessment of one such issue.
"However, we do not wish to prejudice any potential claim by providing further detail at this stage. For the avoidance of doubt, this does not mean that other possible claims have been discounted but only that we are focussing on what we consider currently to be the issue with the greatest prospect of success, that is, cash receipts into the Company".
Mr Adam warns that the funding arrangement for the liquidation with the Manx FSA is subject to continuous review and can potentially be withdrawn at short notice.
He adds: "However, we have maintained dialogue with the FSA throughout the period with respect to the progress of and strategy for the liquidation and, for the time being, the funding arrangement remains in place to allow the investigations to continue".
Mr Adam anticipates providing a further update for investors and creditors in September.
Not Just Sheep & Rugby feels justified in asking yet again for details of due diligence and solvency checks conducted by SBC and by the firms of specialist lawyers and financial experts they commissioned before deciding NES and NERR were the answers to their environmental prayers.
Our view is that a firm which cannot even afford to pay for going bust should never have been allowed anywhere near a £80 million roast dripping with public money. It troubles us deeply that an investigation has not been held into the four-year relationship between SBC and a consortium of cash-strapped businesses incapable of delivering on promises made. Of course, it is never too late....