Investors shocked by latest Avocet revelation

by EWAN LAMB

Shareholders who have invested millions of pounds in the Avocet group of 'disruptive technology' businesses have been told the company has never owned three Berwickshire farms, valued at between £8-£10 million in documents circulated by the firm's directors in 2018.

The shock disclosure is contained in the latest letter to shareholders from Avocet chairman Martin Frost; he describes it as a 'rant', and pledges to resign as soon as possible. The farms in question were earmarked for ambitious agricultural projects by Avocet.

Earlier this year Avocet subsidiary Orrdone Farms PLC (previously called Avocet Farms) was declared insolvent with joint administrators appointed to take control of the company's affairs.

In a report to creditors the Orrdone Farms insolvency team of Emma Porter and Jeanette Brown stated: "The company is recorded at the Scottish Land Register as owning Sunwick Farms, part of Greenwood Farm [Houndwood] and Harcarse Hill Farm. There are a number of allegations and assertions regarding the ownership of these properties and the existence of leases, which are currently being investigated."

UK Agricultural Lending Ltd. claim they are owed £3.2 million - a loan said to have been made to Avocet Farms in 2016 to purchase the farms from another company called Hamilton Orr Ltd.

But Mr Frost has now told Avocet's 650 shareholders that the 'planned loan' from UK Agricultural Lending Limited "never happened to Orrdone Farms Limited".

He states that Orrdone Farms Limited did not purchase the three farms from Hamilton Orr Limited in 2016, adding "regrettably, I, my fellow directors, and company accountants and auditors were misled into thinking that Orrdone had purchased the three farms." He had only discovered this in 2018.

Avocet’s Edinburgh lawyers had advised it was no longer possible to proceed with an Orrdone purchase because Hamilton Orr Limited had been struck off the Company Register. And Mr Frost writes: "Wrongly, I was advised to restore Hamilton Orr Limited to the Company House register and thus the purchase transaction could continue...I confused the position and Hamilton Orr Limited was incorrectly restored with the current situation that all three farms remain Crown Property." 

"Late in 2018, two further faults occurred – namely incorrect property transfer consideration values were shown, and the Edinburgh lawyers wrongly backdated the property transfer to 2016. In 2019, when Avocet was unable to sell the farms due to title problems, I was advised that a court judication (sic) was required to sort out the resultant title and tax mess."

Companies House records show that an application to restore Hamilton Orr Ltd to the Register of Companies was lodged by Mr Frost on October 5th 2018. The company had been dissolved on July 10th 2018.

However, a source who contacted Not Just Sheep & Rugby this week pointed out that in an  Information Memorandum to the Asset Match shares platform dated November 2018, a month after Mr Frost says he became aware that Avocet did not own the farms, Avocet Farms Ltd. is shown to  have assets of £8,321,044 in the last quarter of 2018 rising to £9,121,044 in the first quarter of 2019.

Our attention was also drawn to an Avocet shareholders’ letter of March 2018 which included the text of a lengthy email to Stuart Lucas, a director of Asset Match, dated 5-3-2018 in relation to a forthcoming visit by Mr Lucas to Harcarse Hill for meetings on 7th and 8th March 2018.

Mr Frost wrote: "Note: The Harcarse Hill, Houndwood and Sunwick farms that you will see are being developed to be show pieces of Avocet technology."

And later in the message: "Asset value: as an astute entrepreneur you asked what Avocet’s assets are. Taking tangible assets first – Avocet’s directors as at 5 March 2018 estimate:

Land and farm buildings would fetch £8-£10 million on the open market. Eight cottages and two farmhouses would fetch over £2 million on the open market; plant, machinery and saleable fixtures £1.5 million."

There are a number of other items listed including development land and recreation area. It is then stated: "Against the above Avocet has some £4 million of secured borrowing and trade creditors.".

In his June 28th report to shareholders, Mr Frost tells them: "I fear I have not served you well, but in turn I have been ill-served by some of Avocet’s advisers. Admittedly extreme ill health coupled with both mental and physical attack...curtailed my ability to protect Avocet.

"ANC [Avocet Natural Capital] Plc remains a solid and potentially very highly profitable company despite Avocet generally suffering over £20 million of losses and interest from its agricultural activities. Broadly, some £5 million of this loss may be put down to experimentation and learning, the balance down to the perceived wrongdoing of the Orr family and their acolytes."

And in conclusion, Mr Frost writes: "Going forward, ANC Plc does not need this legacy, as soon as is possible I shall resign – that said, I shall devote the remainder of my life to ensure that justice is done."