"Investment fraud" allegations outlined by shareholders

by OUR BUSINESS STAFF

A number of shareholders who were persuaded to invest in an offshoot of the Avocet 'disruptive technology' group say they intend filing a complaint alleging investment fraud against controversial businessman Martin Frost, a life president of the new company called Gennfros Ltd.

Full details of the potentially serious allegations have been posted on the Avocet shareholders' forum with an invitation to other disillusioned investors to join the cause before a formal complaint is lodged with the authorities.

But in an apparent swipe at the claims Mr Frost says in an email 'on behalf of ANC' (Avocet Natural Capital): "---- ---- and her mates on the Forum have circulated a distraction. Their distraction allegation is perceived to be a contempt of court, a cybercrime, and a profoundly serious ICO breach. As their allegation is a puff with no foundation a host of other nasties will descend upon these clowns."

And Mr Frost goes on to warn that documents attached to his correspondence 'are tracked from the US'.

According to the dossier on the Forum website: "Martin Frank Frost has committed investment fraud by encouraging us and others who were given share purchase options in a new company that Martin Frost and Bob Jennings [also a life president] had created, Gennfros Limited, to exercise those options at £.01 a share because “new investors” were willing to then purchase those same shares from us at the premium price of £3 per share. It is our belief that these 'new investors' did not, and do not, exist."

The proposed complaint charts the brief history of Gennfros Ltd from its incorporation in September 2020.The company was jointly owned by two companies wholly owned respectively by the Frost and Jennings families, with Lancashire accountant Paul Newsham as the sole director. 

On October 29th, 2020 it is claimed that in an email signed by Martin Frost and Bob Jennings and sent to the shareholders of Avocet Natural Capital Plc - a public company of which Mr Frost and Dr Jennings are the sole directors - the Avocet shareholders were told that 80%+ of them would be gifted shares in Gennfros Limited and that “new investors” were prepared to buy £30 million worth of those shares from them.

The document produced by the disgruntled group of investors continues: "In a November 8th, 2020 letter to those same shareholders signed by Martin Frost it was clarified that the gift would be in the form of an option to acquire Gennfros shares and confirmed that the “new investors” would be buying 10 million shares from “grantees” at a price of £3 a share. 

"In a November 9th, 2020 follow-up letter signed by Martin Frost there was further clarification that to exercise their options, grantees would have to pay one penny per ordinary share. A November 16th, 2020 letter under the letterhead of Gennfros Limited and signed by 'Paul Newsham, CEO', again confirmed the 'new investors' interest in acquiring 10 million shares at a price of £3 a share from 'proposed Gennfros Limited shareholders'”.

It has been suggested in recent weeks that references made in Gennfros and ANC newsletters to companies called PCH and Parachute Holdings together with emails from a representative calling himself 'Tim Carter' are allegedly misleading as none of the parties actually exist.

The proposed complaint states: "Approximately 290 individuals did exercise their options and purchase shares. The only direct contact that option holders and shareholders have had with the 'new investors was through a number of recent letters from 'Tim Carter'. 

“Tim Carter’s first letter was sent under the letterhead of 'Parachute Holdings', but contained no address or phone number for that company, or a position title for 'Tim Carter'. 'Parachute Holdings' is not registered with Companies House. In his first letter, 'Tim Carter' announced that the planned share purchase offers would now be conditional ones. The share purchase offer documents he subsequently promised have not been received."

The document concludes: "In our opinion, the lack of the promised firm share purchase offers combined with the continued failure to provide any significant information to shareholders regarding the 'new investors' who we were first told of on August 18th, 2020, makes it extremely likely that these 'new investors' do not, and never did, exist.

"It is our understanding that a significant portion of the money raised by the sale of shares to the option holders is being used by the company to pay monthly honoraria to Martin Frost and Bob Jennings. We contend that Martin Frost committed investment fraud by encouraging the option holders to exercise their options and buy shares in Gennfros in order to better their chances of receiving a purchase offer from the 'new investors', while he knew that these 'new investors' did not exist."

Borders heritage 'a largely untapped resource'

PART TWO OF OUR SPECIAL REPORT FEATURING DR CHRIS BOWLES, FORMER ARCHAEOLOGY OFFICER AT SCOTTISH BORDERS COUNCIL AND NOW IN CHARGE OF COLORADO'S CASH RICH HISTORICAL FUND 

The Scottish Borders may be one of the most blessed areas in the world when it comes to built and archaeological heritage, but the economic potential of Borders history remains largely untapped with the exception of a few shining examples, according to the region's former archaeology officer.

In a wide ranging interview with Not Just Sheep & Rugby, American-born Dr Chris Bowles told of his heartbreak when the burgeoning and highly impressive Borders Heritage Festival 'died on the vine' after most of its financial support was withdrawn in the wake of the hugely successful 2017 event.

And Dr Bowles who now oversees the USA's most generously funded historical preservation fund in his native Colorado, says he received little more than tacit support from Scottish Borders Council for his efforts to promote and develop heritage potential during his eleven years in post.

Dr Bowles said: "As Archaeology Officer, I was always keen to explore this aspect of heritage. I've always felt that heritage needs to 'pay its own way' as a resource in order to remain relevant to communities and visitors alike. It was this belief that led me to create the Borders Heritage Week, which became a month-long Festival over time.

"In the last year it was held, we had thousands of visitors generating significant economic impact in the Borders. Unfortunately, I never received the support this deserved from SBC and the Festival died on the vine despite valiant efforts by those involved. But despite little backing from the Council, I believe we proved the point - the Borders built and archaeological heritage is a rich and largely untapped resource for development."

The 2017 heritage festival cost £125,000 to stage with sponsors including the National Lottery, Museums and Galleries Scotland, Live Borders and the Roxburghe Estates/EDF Fallago Rig Environment Fund.

A report on the event published in Scottish Field in December 2017 charted the progress made by the festival. It attracted a modest 4,490 visitors in 2015, then 20,517 in 2016 followed by an impressive 33,000 over the month of September 2017. And it brought an estimated £1.45 million into the local economy.

The article carried the following quote from Ewan Jackson, chief executive of Live Borders: "It is important that the increased interest and volunteer engagement in the Borders Heritage Forum that has come through the 2017 programme provides a momentum to build on the success of this year for years to come".

But within a matter of a few short months the annual festival was consigned to history, so to speak.

Said Dr Bowles: "2017 was pretty bitter-sweet to be sure as far as the Festival was concerned. We achieved that level of success, and then found ourselves unable to capitalise on it. I put this down to several factors. 

"Since its inception in 2009 when I was the sole organiser, SBC only offered tacit support in that they let me do it and I was able to leverage a little funding we had for conservation and archaeology. Despite repeated attempts to get my Economic Development colleagues to buy in (some of whom ultimately did, but never the senior management), this situation continued for about 5 years. We were then faced with difficult choices on funding and explored a number of options".

A planning and consultation process helped in the creation of a Borders Heritage Forum whose remit would have been to organise the festival and lead collaborative heritage projects. 

"The success of the 2017 Festival proved what could be done with a dedicated resource and we truly hoped it would only grow from there", explained Dr Bowles. "That's actually when SBC did take some notice and Economic Development provided some funds for reporting and future planning. There was also a very small amount of political support, but this didn't translate into a strategic direction for dedicating the necessary time, energy and money needed to support the festival.

"So actually SBC didn't go cold in the end, they went lukewarm...but never really bought into the concept (as opposed to say the Book Festival) so provided too little, too late. Tied to this was the fact that Economic Development was morphing through the Borderlands deal, and the fact that the Lottery wouldn't support more than one year of the Festival."

He complimented Live Borders for giving the festival 'some fabulous support at least for a year'. But then after the Festival, other priorities took over and they were unwilling to support the event further. 

"I'm afraid the Heritage Forum never took off. There was a lot of good will there, but no one really wanted to take on the hard work of developing it. So we took the incredibly difficult decision to shelve the Festival. It was a bit heart breaking for me because of all the time I'd dedicated to it, and because I knew I did and would continue to work to bring not a little inward investment into the Borders, while at the same time encouraging local investment and stewardship of sites around the region."

We asked Scottish Borders Council and Live Borders for comment regarding the demise of the heritage festival. 

A Scottish Borders Council spokesperson said: “To tie in with the 2017 Year of History, Heritage and Archaeology an ambitious partnership bid for funding from various sources was developed. This was successful and enabled a much expanded Borders Heritage Festival programme for 2017 to be established.

“The work of a number of key individuals across the various partners, including SBC and Live Borders, was crucial to both the success of the bid and of the Festival itself.

“Unfortunately with limited interest in the Borders Heritage Forum and competing public sector resource pressures, both staffing and financial, it was not possible to sustain such an expansive and resource intensive Festival in future years.

“Scottish Borders Council is absolutely committed to supporting the establishment of new local events, helping to grow existing ones to become sustainable, and prioritising its investment to deliver the maximum positive benefit to the area.

“The Council would welcome discussions with any individuals, community groups or partners around the development of heritage-based events and would provide support wherever possible in line with the aims of our event strategy.”

THE FINAL PART OF OUR LOOK AT BORDERS HERITAGE STRIKES A MORE OPTIMISTIC TONE.

 

A "rags to riches" heritage journey

SPECIAL FEATURE: PART ONE

DR CHRIS BOWLES: HE LEFT CASH-STRAPPED SCOTTISH BORDERS COUNCIL TO OVERSEE THE LARGEST CONSERVATION FUND IN THE U.S.

For more than eleven years Colorado-born academic Dr Chris Bowles held the key post of archaeology officer at Scottish Borders Council where he played a key role in raising the profile of the region's wealth of history and heritage with decidedly meagre resources.

He also carried out archaeological assessments for a string of controversial planning applications, helped organise an annual conference where the latest discoveries from 'digs' were scrutinised and debated, and was involved in nationally important projects including the Battle of Flodden 500th anniversary.

Dr Bowles left his job at the council without much ceremony in December 2019 and returned to his native land to take up an exciting challenge with History Colorado, a state-run organisation which enjoys an annual revenue budget in excess of $30 million. He was soon making good use of the experiences gained from his lengthy stint surrounded by the rich heritage of the Borders.

Not Just Sheep & Rugby caught up with Dr Bowles to see how his radical career change was panning out.

He told us: "I'm now the Director of Preservation Incentives Services at History Colorado. I have oversight over our incredible State Historical Fund [SHF], the largest state fund for archaeology and historic building conservation in the US.

"Since 1991, the fund has benefited from tax on revenue from three casino towns in the Rockies. We've been able to show that for approximately $300 million in investment over 30 years in what we call 'Historic Preservation' in the States, there has been a direct $1.1 billion economic impact, and further $1.1 billion in indirect impact. This highlights the sheer power of heritage in the development of communities, most of which in Colorado are rural and share many of the issues of towns in the Borders."

Under the arrangement casino customers in the municipalities of Black Hawk, Central City and Cripple Creek produce gambling revenues which are distributed to a number of state controlled organisations. For example the SHF received $26.6 million in 2017/18 from casino levies.

Dr Bowles explained: "As Director of the SHF - currently projected to allocate $8 million in grants for the coming year - I feel strongly that the money should be directed to those heritage projects that deliver real developmental impacts in the state. This also ties in with some of my other passions that I developed during my time at SBC."

In his relatively short time back home he has written Colorado's Historic Preservation Plan as a strategy for the next 10 years combining his love of heritage's power, its connection with place, and the ability for built and archaeological resources to add to the social development of communities, alongside  economic development. "In this, I'm tying our State Plan to the UN's Sustainable Development Goals."

A recent article published by The Southern Ute Drum, the Southern Ute tribe's bi-weekly community newspaper described the SHF's grant-making process and outlined some of the current schemes being financially supported by those casino taxes.

According to the newspaper: "SHF awards grants funded by limited-stakes gaming to foster historic preservation and support vibrant communities in all 64 counties of the Centennial State. The SHF estimates it will award at least $3 million to state-wide projects in the current grant round, with individual grant amounts totalling up to $250,000."

However, Dr Bowles acknowledged in the article that in the past there had not been an equitable share of grants from the fund across all Colorado communities.

He told The Drum: "Unfortunately, we can see that these benefits have been unequally distributed. As we continuously strive to be honorable stewards of public money, it is essential that we redress the imbalance from here on out by working to repair historic inequalities and improve the vitality of as many communities as possible in Colorado. We are eager to achieve this through new adjustments to our grant process, and also through conversations with communities to generate locally meaningful projects and help us reimagine what caring for treasured places should look like.”

The well resourced SHF awarded more than 100 grants state-wide in 2020 with 244 active projects in 55 Colorado counties at the end of last year.

Projects mentioned by the newspaper included Dearfield in Weld County, a farming community founded in 1910 and the only remaining Colorado example of the national African American colonisation movement inspired by Booker T. Washington, and the so-called Granada Relocation Center in southeast Colorado, better known by its postal designation, “Amache”, where Japanese American citizens and Japanese Nationals living in the United States were incarcerated during World War II.

Dr Bowles told Not Just Sheep & Rugby: "I've always felt that heritage needs to 'pay its own way' as a resource in order to remain relevant to communities and visitors alike.

"It's often subconscious, but without the surviving elements of our past all around us we lose a sense of ourselves, our communities and our place in the world."

IN PART TWO: STRONG VIEWS EXPRESSED BY DR BOWLES ON THE RELATIVE LACK OF EFFORT TO PROMOTE SCOTTISH BORDERS HERITAGE FOR ECONOMIC BENEFIT.
 

Communique with its own 'kill/destruct program'

by DOUG COLLIE

The inscrutable Parachute Holdings (PCH) and its sphinx-like executive 'Tim Carter' surfaced yet again at the weekend when Carter and Avocet Natural Capital (ANC) chairman Martin Frost provided shareholders in their 'disruptive technology' businesses with a self-styled joint communique.

But news of the latest developments involving industry newcomer Genfro Ltd left some investors distinctly unimpressed with claims there was still no sign of PCH at Companies House, and suggestions that its representative Carter did not exist but was a figment of Mr Frost's imagination.

Not Just Sheep & Rugby can neither substantiate nor disprove such allegations.

While readers of the communique, called an Overview,  were treated to a list of personal issues linked to Mr Frost there was little or no mention of his new 'colleague' although a question and answer was included in the five page message as follows: "Is Tim Carter a person? Yes: but Tim is also a generic name."

Shareholders were told of highly ambitious plans for numerous new patents under the Genfro banner with a possible combined value of £300 million. And shares in the enterprise will be traded on Panama's stock exchange Bolsa de Valores.

According to the communique: "PCH has arranged to gift money into Gennfros Trading Limited to allow Gennfros Trading Limited to be the physical vehicle used to purchase Omega ordinary shares and buy up Omega / Orrdone debt. Gennfros Trading Limited (a Genfro group company) is 100% owned subsidiary of Genfro Limited has acquired the assignment of Omega Infinite Plc / Orrdone shares alongside debt due by Omega / Orrdone to its creditors."

It was revealed earlier this month that Omega's creditors have lodged claims totalling £20.9 million while several millions of pounds are also due to creditors of Avocet subsidiary Orrdone Farms.

The correspondence explains: "PCH which ultimately controls Parachute Holdings SA. has secured Jewish funding for new intellectual property, to be registered and owned by Genfro Limited. The funding is explicitly to be used for the creation of new or improved intellectual property. This funding is NOT repayable and all that is requested is that any intellectual property produced is freely and openly shared with the State of Israel, other beneficiaries will be obliged to pay a commercial price. This funding cannot be used for the payment of old Avocet or Genfro liabilities."

Shareholders were also informed that PCH facilitated the original sale of "old AFS intellectual property". AFS Ventures, another company controlled by Mr Frost has been in the process of being liquidated since 2015.

But now the communique states: "This sale will no longer happen in the manner once thought. That said, and not withstanding the creative zeal & naughtiness of some of Begbies soldiers [Begbies Traynor are Omega Infinite's liquidators]: ANC Plc still expects to secure meaningful cash returns to ANC Plc shareholders soon. 

"This week Martin Frost secured the Irish property foundation base. There is still mileage to go and matters to be sorted with the Omega’s liquidators but there is now greater optimism for the EU base than in 2019."

A number of the questions and answers set out in the communique are of little relevance to Avocet/Genfro's business affairs.

But the following may be considered noteworthy by investors: "Did Avocet money pay for Martin Frost’s home? Harcarse Hill farmhouse (a propert in Berwickshire) was a company owned farmhouse. In 2020 Aver (administrators of Orrdone Farms Ltd) broke into my and Janet’s (Mrs Frost) home and stole or destroyed many items. Aver then wrongly duped Begbies to remove goods: currently Janet and I are seeking restitution. 

"Prior to moving into Harcarse farmhouse, Janet and I rented a flat in Scarborough. In 2016 an opportunity arose to buy this flat. Such purchase occurred and I used some monies personally due to me from Avocet to fund this.

"Did Martin Frost lend money to Avocet? Yes: via loans and arrears of salary some £3 million. Via Loch Lomond Heritage Limited some £7 million. On top of which I reckon to have had a further £10 million destroyed or stolen."

In a sinister sounding final paragraph the communique warns: "Please note that this attachment has a sophisticated tracker which enables a kill/destruct program should you choose to wantonly reproduce or pass on this document contrary to your NDA (Non-Disclosure Agreement).

 A veteran Avocet shareholder who contacted us about the communique commented: "It speaks to the depth of absurdity to which we have descended that Frost has to reassure us that one of his colleagues and a key player in the organisation, actually does exist!

"Frost’s retirement from Genfros and Avocet seems to have been short-lived, as here he is a mere seventeen days later, again writing to us on those subjects."

And with regard to the 'kill/destruct' attachment our source remarked: "I was somewhat alarmed by the last sentence of the 'Overview' which threatened to launch a program to kill me if I forwarded it on to anyone. Just to be on the safe side, I have locked my doors and turned all the lights on".

 

"*Old Fizzlebilly's" legacy survives 200 years on!

by DOUG COLLIE

He was a young man of extremely modest means who would make his vast fortune in later life more than 11,000 miles from his home town of Jedburgh.

But 200 years after his birth in 1821 John Tinline's name is still remembered and respected in the Scottish royal burgh where he spent his childhood, and in Nelson, New Zealand where he left his indelible mark on local society.

His was a remarkable life story. At the tender age of 18 Tinline swapped his lowly post as an apprentice in a Jedburgh solicitor's office for the excitement and uncertainty of a largely unexplored territory on the other side of the world.

But there would be many ups and downs before John established himself as the 19th Century equivalent of a multi-millionaire. A real life rags to riches adventure after he decided to follow his brother George to Australasia.

The Cyclopedia of New Zealand's Old Colonists describes how John Tinline ended up in New Zealand rather than Australia where his brother worked as an accountant in a leading bank.

John left Scotland in September 1839 aboard the ship “Bengal,” bound for Sydney., Australia.

The Cyclopedia records: "On his arrival there, in January, 1840, Mr. Tinline found that his brother had been moved to a branch of the bank in Adelaide, so he lost no time in taking a passage for that town. After spending a few months on the survey staff, in Adelaide, he emigrated to Wellington, New Zealand, where he arrived in September, 1840. and where his cousin. Mr. Robert Waitt, was in business as a merchant."

In October, of the same year, Mr. Tinline joined a Major Durie, and the partners opened up a business as storekeeper on Lambton Quay in Wellington.

"Early in 1842, when the settlement of Nelson was under way, Mr. Tinline, at the instance of his partner and Mr. Waitt. went to Nelson with a cargo of goods, to be in time for the arrival of the first settlers. He established a general merchant's business in Nelson, under the name of Waitt and Company.

"But unfortunately, in November, 1842, the warehouse belonging to himself and Major Durie in Wellington, was totally destroyed by fire, by which the partners lost all that they possessed. Mr. Tinline then remained in Nelson for some time to wind up the business of Waitt and Co."

However, John's fortunes were to change dramatically in early 1844 when Governor Robert Fitzroy arrived in Nelson to establish a system of local administration. In making his appointments the governor selected the 23-year-old Tinline for the position of Clerk of the Magistrate's Court, and Native Interpreter.

After his arrival in New Zealand John had shared accommodation with a young Maori and soon became a fluent speaker of the native language. He was able to negotiate land deals with the Maoris, and also carried out valuable surveys of the uncharted lands around Nelson. John remained in the Government service until the end of 1852.

According to the Cyclopedia: "He filled several important offices, and did his share in the arduous work of building up the prosperity of the province."

In 1853 John turned his attention to sheep farming, an activity he succeeded at on an unbelievable scale over the next 30 years. He owned a string of massive sheep stations including Weld's Hill, Green Hills, and Ferniehurst, in Marlborough, and Lyndon in Amuri. 

To illustrate the sheer scale of his business Lyndon alone comprised more than 80,000 acres, about 50,000 acres of which were freehold. The entire property, including 40,000 sheep, was eventually sold by Mr. Tinline for a vast sum while the disposal of tens of thousands of acres also in his ownership added to his great wealth. 

The lifelong bachelor switched his focus to philanthropy on a grand scale, both in New Zealand and back home in Jedburgh. He also found time to promote the extension of railways and telegraph services 'up country'.

John made several generous financial gifts for the benefit of education in his adopted country. For example in 1886 Tinline donated the sum of £1,000 (the equivalent of more than £130,000 nowadays) to provide scholarships for students advancing to MA in English. And the John Tinline Prize in English was established at the University of Otago in 1965.

The University of Auckland also offers an annual John Tinline Prize in English with a value of 800 NZ dollars while a similar award is made by the University of Wellington (500 NZ dollars).

At the age of 70 he made the long journey back to Jedburgh where, in 1891, he gifted Allerley Well Park to the town and was honoured with the freedom of the burgh.

John Tinline died at Warwick House, his New Zealand residence, in February 1907.

*His nickname 'Old Fizzlebilly' stemmed from his flowing white beard.

CGI's Borders job creation well behind schedule

by LESTER CROSS

It was a £92 million deal which promised a state-of-the-art technological "centre of excellence" and 200 new quality jobs for the Scottish Borders in three years when it was signed back in 2016.

But new figures obtained by Not Just Sheep & Rugby show this crucial element of that 13-year contract  which resulted in Scottish Borders Council outsourcing its IT services to the giant CGI corporation remains to be fully delivered five years later.

In fact, by October 2019 CGI had only created 71 'new' posts in support of the Borders council contract, and that included the 46 local authority staff members who were transferred over as part of the deal. And the delivery centre development had not even started.

There was widespread surprise within the world of technology when the council announced last October it was extending the arrangements with CGI until 2040 without exposing the work to competitive tender, adding £99 million to the value of the massive deal.

It was revealed via Freedom of Information that the extended contract committed the council to finding £34 million over a fairly short period to fund 'transformational investment'.

When the partnership was formed five years ago the Borders public was told it would mean, among other things: "The creation of a delivery centre within the Borders, with 200 new jobs within three years – a potential gross value added of £107.1 million."

In an effort to see how the jobs and investment programme was progressing we submitted a number of questions to CGI as it seemed clear the three-year target had not been met.

Here is the full list of questions and responses received from CGI:

[1] How many new jobs did CGI create in the Borders by 2019?

 

As at October 2019, CGI had created 71 full time jobs supporting the Scottish Borders Council-CGI contract.

 

[2] Why was the delivery centre not ‘delivered’ within the announced timescale?

 

The Council confirmed in 2019 it was proposing to build a new office for CGI in nearby Tweedbank, with 152 seats, to open in 2021. The building is currently in progress and the build has been hampered by the Covid pandemic. It is now expected to be accessible by December 2021.

 

[3] How many new jobs has CGI created in the Borders to date?

 

CGI has currently created 103 jobs within the Borders. This includes nine Borders based graduates who have accepted offers to begin their careers with CGI in August of this year. CGI also currently has open recruitment positions for 23 service desk members who will be based at Tweedbank once in place.

Additionally CGI plan to open a test automation centre in the Tweedbank Office. Recruitment is underway for members who will work in the test automation centre and we are aiming to recruit apprentices, graduates and people who are new to or returning to work or changing employers.

We aim to run many UK accounts’ test work from Tweedbank meaning demand for test roles will increase.

 

[4] the delivery centre has yet to open, and a building is currently under construction by Scottish Borders Council for CGI at Tweedbank, near Galashiels.  When will that project complete; when do CGI plan to move in; and how many people will be working there at the outset?

 

The completion of the Tweedbank building has been delayed due to the impact of the Covid pandemic. The building is now on target to be handed over to CGI in late August. The building will then be fitted out by CGI with a target of December 2021 to move into the Tweedbank building.

There will be 103 employees transferring over alongside any additional recruitment made between now and then.

In a follow-up question seeking clarification, we asked: "Did the 71 full time jobs referred to in [1] include the 46 council staff who were transferred to CGI after the 2016 agreement was signed?"

In reply, CGI stated: "The number of TUPE [Transfer of Undertakings Protection of Employment) staff from the Council was 46 at the time the service transferred to CGI and these job are retained within the 71 detailed in point 1. The contract between CGI and the Council recognised that the staff would transfer and be included on the job numbers. CGI continues to actively recruit within the Scottish Borders region as described in our other responses."

Insolvency Service investigating 'Avocet's' affairs

by DOUG COLLIE

Omega Infinite PLC, the insolvent former parent company of the Avocet group of 'disruptive technology' businesses, is the subject of ongoing investigations by the Government's Insolvency Service as well as exhaustive inquiries by liquidators.

It was disclosed last weekend that creditors of Omega (formerly called Avocet Infinite) claim they are owed a total of £20.9 million following the company's financial collapse. The identities of those creditors have not been made public by the liquidation team from insolvency specialists Begbies Traynor.

But a progress report on the liquidation included the line: “Time has been spent liaising with the Insolvency Service in relation to their inquiries into the company’s affairs”

Not Just Sheep & Rugby asked the Insolvency Service for details of its particular investigations currently underway at Omega Infinite.

A spokesman told us: "Our enquiries are ongoing and we cannot comment on investigatory activity".

The Official Receiver has a duty to investigate the cause of failure of the company and the conduct of all individuals involved in the management of the company. If any misconduct is identified then the Official Receiver can apply for a disqualification order for a period between 2 and 15 years. 

We were told: "The Insolvency Service will pursue civil enforcement measures if misconduct is found and where there is evidence of criminal wrongdoing, our civil investigators will pass their evidence on to our criminal investigation team or the relevant prosecuting authority."

As reported earlier this week the liquidators are also probing Omega Infinite's finances. Their report says: "As the investigations are ongoing, it would be prejudicial to the investigations for us to comment in any further detail at this stage. If any creditor has any information that they feel may assist our investigations, they are invited to contact our office and provide their contact details".

Among their many threads of inquiry, Begbies Traynor mention in their report the alleged theft of Company assets. According to the document: "We are currently liaising with police and the former directors with a view to establishing the position regarding an alleged theft relating to Company assets, and the insurance position of the same. The current ownership position in respect of the assets is still uncertain and requires clarification".

The affairs of Omega Infinite are closely linked to those of an insolvent 'Avocet' subsidiary, Orrdone Farms (OF).

As the Omega insolvency team report: "OF entered into administration on 23 January 2020 and the joint administrators successfully attached to the petition to wind up the Company. The OF administrators' proposals suggest OF is owed circa £2.2m by Omega.

"Information provided by the directors [of Omega] suggests that the actual position is that the Company is owed circa £20.2m by OF. We have reviewed the position with regard to the intercompany debt between OF and the Company and based on the information received and financial records reviewed to date it appears that the Company is a creditor of OF, if deemed appropriate we will register a claim in the administration."

And the report continues: "It is also apparent that interest payments in the sum of £455,000.00 have been made from the Company's account against a loan from UK Agricultural Lending Limited ("UK ALL") to OF. It does not appear that the Company had any liability to UKALL or interest in the assets to which the security related, therefore it is uncertain why the Company would have paid the interest on these loans."

Under the heading assets, antiques and motor vehicles, Begbies Traynor report they are in the process of liaising with Eddisons, (asset sales specialists) to compile a schedule of assets, with a view to establishing ownership and arranging collection and disposal of them 

"This task has become protracted due to the lack of records regarding the Company's assets and ambiguity regarding the ownership of the same. In relation to certain assets, MD Law (solicitors) have been instructed to enter into correspondence with the relevant parties to assist with the recovery. 

"Time has been spent liaising with Close Brothers Asset Finance in Scotland with regard to recovery of farming equipment which was subject to Hire Purchase agreements. The items have now been recovered and it is anticipated that there will be a shortfall following the sale of the items.

"Eddisons have recovered a painting from the Company's accountant which was being held as collateral for unpaid fees.".

The liquidators have also been involved in assessing assets at Harcarse Hill Farm, Berwickshire, scene of a planned major farming enterprise by Avocet. The report notes:"Eddisons attended the premises owned by OF at Harcarse Hill Farm and recovered assets. Eddisons are in the process of cataloguing the items with a view to a sale by way of an online auction".

Borders demographic timebomb still ticking...

by DOUGLAS SHEPHERD

The mounting pressure on health and social care services in the Scottish Borders is set to intensify even further with the region's "over 75s" set to rise by no less than 30 per cent by 2026, according to a report from the so-called Integrated Joint Board (IJB).

NHS Borders has already received brokerage (extra cash) from the Scottish Government after exceeding its budget due to excessive demand for services. Meanwhile the IJB which represents the Borders Health and Social Care Partnership has also had its finances topped up by the partners.

The report which contains the IJB's annual accounts for 2020/21 paints a graphic picture of the issues associated with an ever-aging population.

It says: "58.8% of the population of the Scottish Borders is aged between 16 and 64 years of age. This is against a national average of 64%. Conversely, 24.8% of its population is over 65 years of age, significantly above the national average of 19.10%. 

"Whilst the overall population of the Scottish Borders may not be projected to increase significantly over the coming years, the average age of the Scottish Borders population is expected to continue to increase: i.e. as the current older working-age cohort become pensioners with an increased life expectancy, there is expected to be fewer younger people to replace them. 

"The Borders 16- 24 age group is projected to further decrease by over 10% before 2026), and the 75+ age group is projected to increase by almost 30% over the same period. These demographic factors therefore have a unique and challenging impact on the models of health and social care provision in the Scottish Borders and their costs and directly drive the strategic objectives, transformation requirements, planned shifts in the balance of care and resource realignment targeted by the Health and Social Care Partnership."

The partnership spent over £175 million on delegated functions in the last financial year.

And the report explains: "Additional funding allocations were made by the Scottish Government during the year to mitigate the net financial pressures. Additional contributions also required to be made by partners to deliver the reported position. At the end of the financial year, £0.093 million of corporate support was provided to Health and Social Care functions by Scottish Borders Council and £3.925 million of additional support was provided by NHS Borders. This additional budget delegated was primarily available as a result of under-spends and additional funding allocations across non-delegated Health and Social Care functions."

A commentary on the financial outlook for the IJB warns: "The IJB continues to face significant financial challenges and both of its partners are facing challenges in meeting the demand for health and social care services within the financial quantum available. This, going forward, will have a direct impact on the levels of funding provided to the IJB. 

"Within the IJB, the key barriers to managing the financial position arises from demographic pressures of demand, together with capacity to plan and deliver required levels of transformation and efficiency savings. The significant growth anticipated in the number of older people and their need for suitable services, requires innovative solutions to allow services to be provided within funding levels available and, the ability of the partnership to transform services to help meet this demand."

The report also lists a number of 'risks' facing the service going forward.

"With pressures across all health board and council functions as a result of the Covid-19 pandemic, both delegated and non-delegated, there is a risk that if these are not funded by the Scottish Government in full, neither partner will be in a position to make additional contributions to top-up the budget delegated to the IJB or Set-Aside as it has in previous financial years. Accordingly, the Partnership may be at risk of over-spend, without mitigating solutions, at the end of the financial year.

"The financial challenges facing NHS Borders is expected to result in a requirement for further brokerage in 2021/22 to enable it to meet its statutory obligations, including funding any over-spend incurred by the IJB; prescribing remains a high risk area due to the forecast level of spend and volatility of price and supply. Whilst there was a significant downturn in the level of prescribing and resultant expenditure levels in 2020/21 due to Covid-19, as primary care services remobilise, this trend is not expected to continue".

'Avocet' creditors owed £20 million- liquidators' report

by DOUG COLLIE,

Investors in the Avocet Group of 'disruptive technology' businesses who were promised annual profits of £300 million by 2021 have been told by liquidators of the former flagship parent company that unsecured creditors have lodged claims in excess of £20 million.

The first published report from Avocet Infinite PLC's joint liquidators Ashleigh Fletcher and Joanne Hammond, of insolvency specialists Begbies Traynor since their appointment in April 2020 makes grim reading for the 650 shareholders of the firm, re-named Omega Infinite in 2019.

The document states: "Our investigations have uncovered transactions which require further investigation. We are carrying out an extensive investigation into the reasons for the Company's failure and the financial performance of the Company."

Yet company sales and profits forecasts circulated by Avocet Infinite chairman Martin Frost in January 2018 predicted: "Avocet Agriculture sales £50 million, profit £10 million; Avocet Infinite Renewables sales £1,000 million, profit £200 million; Avocet Fuel Systems sales £3,000 million profit £150 million; and Avocet Bio Solutions [Irish-based subsidiary] sales £2,000 million, profit £250 million."

And Mr Frost declared: "It is an unfortunate fact that the Avocet philosophy has not been received with open arms by the UK or Scottish Governments even though Avocet, by 2022 is likely to generate a greater sales income than the total of the Scotch Whisky indusry".

For the record, in 2019 producers of Scotch clocked up combined sales of £4.096 billion.

The so-called progress report from Begbies Traynor shows the distinct lack of progress in Avocet's operations.

The massive debts of the liquidated company have been revealed just days after shareholders were told 90 per cent of the 'avocet' intellectual property had been 'lost' after directors failed to pay annual fees on the range of patents said to be held by subsidiary Avocet IP Ltd.

Says the report: "We have continued to review shareholder updates in relation to associated Companies provided by the director, regarding the sale of the intellectual property and subsequent payment of creditors. We are aware that reference has been made to the purchase of the Company's shares and other matters pertaining to the liquidation including the payment of the Company's creditors and costs with a view to applying to rescind the winding up order.

 "We can confirm that to date no creditor has formally withdrawn their claim in this matter and no funds have been received into the estate."

The liquidators indicate they are aware of a number of changes to the group structure prior in the period immediately leading up to their appointment.

"We are in the process of reviewing the changes to the group structure with regards to any potential impact it may have had on the Company's financial position. We are also investigating    any asset movement between associated companies and the intercompany debt position."

The report covers a range of other issues. It adds: "We are aware that the Company owned 100% of Avocet Natural Capital Pie, the Company demerged 100% of Avocet Natural Capital Pie to its shareholders, which included a 90% ownership of Avocet IP Limited. We are in the process of reviewing the demerger and the potential impact it has had on the Company and its shareholders.

"We understand that the Company sold its IP to an associated Company in December 2018. We have carried out an initial review the transfer of the IP with regards to the consideration received to ensure that the level of consideration received for the transfer of the IP was a fair value. 

"We are also aware that as part of the agreement, the associated Company was to also pay the Company £1m per franchise set up, for each master franchise and the Company is to receive 30% of the profits generated through seven franchise companies. We can confirm that no payments have been received to date. 

"Our investigations into the transfer of the IP are still ongoing and it would be prejudicial to the investigations for us to comment in any further detail at this stage. Notwithstanding any financial benefit (or otherwise), we have a statutory duty to undertake this work, therefore these costs cannot be avoided. Further, these investigations seek to protect the interests of creditors (and the wider public) by identifying and reporting offences which may not lead to recoveries for the estate, but may result in the directors being disqualified."

A Statement of Affairs in the liquidators' possession includes a figure of £1.050,000 for 'stock'.

The report notes: "(Avocet Cetane Additive) We are aware that the Company owns a quantity of Cetane Additive which the director advises has significant value, we have liaised with the director and Eddisons [an associate company of Begbies Traynor]  with regard to the marketing and disposal options available in respect of the same.

" A quantity of cetane additive has been recovered by Eddisons and is securely stored. We have been made aware that a quantity of Cetane Additive is held by JCB, attempts have been made to contact the relevant person at JCB however no response has been forthcoming to date."

Creditors are also told: "A meeting was held with the directors on 7 August 2020 at which we were advised by one of the directors that payment would be made by them personally to the Company's former accountants. This payment would enable the completion of the Company accounts by mid-September 2020, which would enable the VAT returns to be completed and the refund to be processed. We have been assured that this is progressing but to date the accounts have not been completed and the outstanding returns and supporting documentation have not been submitted to HMRC."

Turning to the outlook for creditors, the report states: "Unsecured creditors were estimated at £18,343,062.24 in the OR's (Official Receiver) handover notes. Claims in the sum of £20,918,919.93 have been received to date. For the avoidance of doubt we have not adjudicated on any of the claims at this stage. 

"Based upon realisations to date and estimated future realisations it is uncertain whether there will be sufficient funds available to enable a dividend to be paid to the unsecured creditors."

There are also significant costs associated with the work of the liquidators: "Our time costs for the period from 28/04/2020 to 27/04/2021 amount to £317,679.50 which represents 990.30 hours at an average rate of £320.79 per hour".

Dismay as Avocet IP loses 90% of its patents

by EWAN LAMB

Investors in 'disruptive technology' businesses Avocet and Genfro have been shocked to discover that 90 per cent of the patents linked to the companies have been "lost" since 2019, reducing the value of intellectual property from a possible figure of £400 million to just £69 million.

The disclosure came in an email to Genfro [the firm changed its name from Gennfros on July 1st) shareholders from the inscrutable 'Tim Carter', of the equally inscrutable Parachute Holdings (PCH), the business which now employs Avocet chairman Martin Frost.

The correspondence contained lists of patents which had already lapsed and others which would suffer a similar fate unless fees were paid by the end of June.

Extracts of emails sent to Mr Frost by fellow Avocet director and Genfro life president Bob Jennings warned: "Dear Martin, This is not good news. We have filed some 120 cases in various countries and the majority have lapsed.

"Some others are still live pending further checks, but will need completion fees to be paid by June 30th. All of the rest have lapsed, with little chance of reinstating. The June date is absolute and must be paid if we are to recoup some value."

According to 'Carter' PCH has arranged for a formal valuation of the remaining intellectual property list to ascertain the strength of  Jennings' guesstimate of £69 million. Dependent upon such valuation PCH may than provide the cash to Genfro Limited to purchase Avocet IP Limited from Avocet Natural Capital Plc.

Long suffering shareholders are also told that PCH will pay the overdue fees on the relevant patents and this intellectual property is to be transferred into the ownership of Genfro Limited.

As well as referring to possible dividends for investors, Carter's email states: "PCH is aware that Genfro has strong links with Asset Match – a company which (a) provides online stock market services, (b) offers an electronic trading platform for unlisted private company shares. Notably, Asset Match markets and serves investors and shareholders of private companies worldwide."

In March, Mr Frost circulated extracts from court documents which had been filed as evidence for his bankruptcy hearing which claimed Avocet IP patents had been independently valued by Coller IP in December 2019 with an estimated worth of up to £400 million.

The paperwork also showed there was a pending transaction for the purchase of Avocet/Gennfros 'jet fuel from air' intellectual property for 100 million US dollars to be concluded in mid-April 2021.

After reading the 'From the desk of Tim Carter' update one clearly angry observer told Not Just Sheep & Rugby: "I am astounded by the staggering incompetence of Frost and Jennings who, as directors, allowed all of these patents to lapse and only learned of it on June 25th, 2021. 

"Other than the Loch Lomond jetty, these patents represent the only significant asset that ANC [Avocet Natural Capital PLC] has. Of the 120 patents/applications, according to Jennings, only 28 remain viable and only if the outstanding fees are paid. This is especially galling since the renewal fees for a patent are relatively nominal - for example, in the UK £70-£610.

The contributor said they were equally astonished that nine of the patents now in jeopardy - patents that in total ANC shareholders paid £16 million to develop - were to be transferred to Gennfro(s) if PCH simply paid the very nominal outstanding fees, with apparently no further compensation to be paid to ANC's shareholders.

And our commentator added: "We have the mysterious precipitous decline in the value of the "air-to-fuel" patents. We were originally told that they were to be sold for US $100M; then we learned only US $90M was in escrow, and now we learn that only US $20M is available to be paid out in dividends, and that is to be shared between the Avocet Natural Capital Plc and the Gennfro(s) shareholders, even though Gennfro(s)'s shareholders have no ownership claim on this IP whatsoever. All very strange indeed."