Allegations of Avocet 'Ponzi' schemes dismissed by directors

by DOUG COLLIE

The management of the Avocet Group of businesses took the opportunity to strongly refute allegations they were running so-called Ponzi schemes and indulging in theft and VAT fraud following a petition seeking to liquidate their flagship company.

A 'private and confidential' letter sent to hundreds of shareholders in early February also revealed the likely extent of the indebtedness of Omega Infinite PLC, (previously called Avocet Infinite) including some £1 million owed to two law firms with more than £2.5 million said to be due in total to trade creditors.

The eleven-page letter running to some 5,000 words sought to explain the reasons why Avocet's directors had decided it was "publicly best" to allow Omega Infinite to go to the wall. It had been at the forefront of the Group's activities which include 'green' fuel and revolutionary crop and livestock production.

Despite its parlous financial state in the early months of 2020 the Infinite brand was still being regularly featured in Parliamentary Review, a Westminster-based publication which charges businesses up to £4,000 for inclusion in its 'Best Practice' pages. The outlet is chaired by former government ministers Lord (David) Blunkett and Lord (Eric) Pickles.

In the February letter Martin Frost, Avocet's chairman, told shareholders: "Omega Infinite Plc is to go into some form of insolvency. A winding up petition initiated by lawyers Fieldfisher for some £400,000 is to be heard on February 12th in London; likely now to support this petition are lawyers Womble Bond Dickinson for another some £600,000 along with various other creditors for £300,000. 

"The total trade creditor indebtedness of Omega Infinite Plc is likely to reach some £2.5 million, and on top of which there are private Avocet controlled loans in excess of £10 million. Despite this debt Omega Infinite Plc is an absolute (sic) solvent company which should eventually provide each recognised shareholder with over a tax effective £2 return per ordinary share.

Investors were also informed that from both personal and company resources the Omega insolvency could have been prevented. But the directors decided it was "publicly best that the world should see the nastiness of the Scottish Borders rumour mill".

The letter continued: "In recent weeks the directors of Omega Infinite Plc are accused of theft and fraud. It is alleged that the directors have stolen all the money out of Omega, that we engage in VAT fraud, that we are running Ponzi type schemes with our master franchise companies."

Mr Frost, who recently gave notice of his intention to raise legal actions against 'naysayers' and some shareholders, added: "I can confirm that Omega has indulged in an extensive ‘fact find’ so that the miscreants can be identified, reviewed and then appropriately dealt with – and to this end Avocet is allocating substantial resources."

In April joint liquidators were appointed to Omega Infinite which was also the subject of a Winding Up order by the courts. The investigation into that company's affairs is ongoing.

An assurance was given that the value of shares would not be diminished by Omega Infinite's insolvency. The company had issued 22 million one pound shares prior to court action being instituted against it.

According to the February document: "Both your demerged shareholding in Avocet Bio Solutions Plc (an Irish-based subsidiary) and Avocet Natural Capital Plc (Avocet’s new flagship company) are worth at least the face value of your share. In real terms for each pound invested in Omega Infinite Plc there will be a collective return of over £4 – which on balance is excellent."

Avocet's recent decision to switch shares in Omega Infinite to Avocet Natural Capital [ANC] resulted in a 50% uplift in each individual shareholding.

Investors were told in February: "On ANC Plc there are realistic plans to increase the issued share capital to 350 million one pound fully paid shares. The bulk of this new investment coming from the Middle East with China a useful second. Currently, there are 50 million ANC Plc shares – holders of these shares are likely to receive a bonus share for each share legitimately held – this will then bring the issued capital to 100 million on top of which Middle East, Chinese and institutional investors will take a further 250 million shares for cash."

"Because of the magnitude of the perceived net worth of Avocet, a full Dublin Stock market listing is expected in 2020. That said interim arrangements are being put into place for ANC Plc to shortly trade on Asset Match [London based investment specialists] from April 2020."