"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."