Investors' embezzlement claims against Avocet chairman

by OUR BUSINESS STAFF

Shareholders who fear they have lost millions of pounds following the collapse of the Avocet group of companies are behind a complaint to Police Scotland alleging their money has been misappropriated by bankrupt businessman Martin Frost.

In the past Mr Frost has denied the Avocet venture, based around the development of a revolutionary fuel to power vehicles, was a Ponzi scheme even though his companies have failed to bring any commercial product to market since he launched the group in 2014.

Now, according to an article in today's Sunday Times, he is strongly refuting allegations of theft and embezzlement of an estimated £15 million from investors in Avocet. Apparently he pins the blame for losses on criminal activity by others.

A source told Not Just Sheep & Rugby that around 50 shareholders are supporting the demand for a criminal investigation into Mr Frost's business dealings, and lodged an official complaint with the police and Scotland's Crown Office during the course of last week.

We were also told: "The failure by any of the regulatory bodies including Companies House and the Insolvency Service to look into the activities of companies controlled by Mr Frost over the last 40 years is astonishing. It is to be hoped the police will manage to get to the bottom of the mystery surrounding the missing Avocet millions".

Last month we reported on the frustrations which have plagued the administrators who are probing the financial collapse of Avocet subsidiary Orrdone Farms Ltd. Emma Porter, the insolvency expert in charge of the inquiry confirmed in her latest progress report to creditors that Mr Frost and others who ran the failed business had refused to co-operate in her quest for data, financial records and other paperwork linked to the collapse.

Hundreds of wealthy and not so wealthy individuals had bought shares in Omega Infinite, the Avocet flagship company which is currently in compulsory liquidation. Mr Frost and his fellow directors later switched the share holdings into Avocet Natural Capital PLC [ANC], a business which has not produced accounts since 2018.

However, although the subsequent financial report for 2019 is now long overdue, and a confirmation statement should have been with Companies House last November, ANC remains active and on the Register. Mr Frost relinquished his directorship of that particular firm on February 8th, no doubt a consequence of his bankrupt status.

According to today's Sunday Times article, retired police officer Gary Flannigan, who has been supporting the complainers, commented: "“Economic crime has a huge impact on our economy but ultimately it is the public who end up footing the bill.

“This particular case seems to be an extreme example of how an individual is able to manipulate inherent weaknesses in companies law to potentially misappropriate millions of pounds from investors. It demonstrates the urgent need for legislative change.”

The newspaper also covers previous business failures by companies controlled by Mr Frost from the 1980s onwards.

In a number of instances former employees raised employment tribunal proceedings against Mr Frost claiming wages had not been paid, pay had been withheld, and sometimes there were allegations of unfair dismissal.

During the course of 2020 and 2021 we reported the experiences of former Avocet employees Tristan Jeffrey and Sarah Shotton. They were subsequently awarded thousands of pounds by a tribunal judge. But neither of them has received a settlement from their one time employers.

And The Sunday Times reports: "One individual who has a relative that invested in Avocet, said: 'Avocet reminds me of the Wizard of Oz. I suspect there really is nothing behind the curtain other than an old man pulling strings. However, in the movie the old man was a benevolent fellow. In this situation, in my view, not so much.'”

Mr Frost, who has frequently threatened legal action against individuals who challenged him or suggested the Avocet enterprise might be a scam, is quoted by the Sunday newspaper as saying he “refutes the allegations of fraud and embezzlement”.   He said he had no knowledge of the complaint to Police Scotland.

As reported previously in these columns, Mr Frost told shareholders in news letters he circulated last year that the "valuable" patents associated with the avocet fuel had been sold for tens of millions of dollars to an unnamed purchaser.

At his bankruptcy hearing before Leeds County Court a lawyer for the petitioners identified the buyers named by Mr Frost in court papers, as the Israeli Government's security service.

But John Rodger, counsel for those seeking bankruptcy orders against Mr Frost and his wife, said: "His assertion that essentially 21st century alchemy is going to put $6.1 million in his pocket is fanciful and utterly without substance."