Premier Group (Isle of Man) Ltd goes into liquidation. Inspector appointed to investigate Eco Resource Fund. What next for Troy Wiseman and EcoPlanet Bamboo?

EcoPlanet Bamboo runs bamboo plantations in Nicaragua, South Africa and Ghana. A UK company called EcoPlanet Bamboo (UK) Ltd sold “bamboo bonds” with a promise of “a 500% return on investment over a 15 year period” on an investment of US$50,000. But in December 2015, EcoPlanet Bamboo wrote to bondholders to tell them that their investment was not doing particularly well.

Bondholders were offered the option of converting their bonds into shares in an Isle of Man based company called the Eco Resources Fund PCC. The manager of the Eco Resources Fund PCC and its various sub-funds was The Premier Group (Isle of Man) Limited.

REDD-Monitor has written a series of posts about EcoPlanet Bamboo’s investment scheme, and in December 2016 I wrote about EcoPlanet Bamboo’s (perhaps surprising) response:

---

---

Premier Group (Isle of Man) goes into liquidation

On 30 November 2016, the Premier Group (Isle of Man) Ltd held an extraordinary general meeting, during which this resolution was passed:

“Resolved that the Company be wound up voluntarily and that Craig Mitchell and David Peter Craine of Browne Craine & Co Limited, Burleigh Manor, Peel Road, Douglas, Isle of Man be appointed Joint Liquidators for the purposes of such winding-up.”

And on 16 December 2016, his Honour the Deemster Doyle in the High Court of Justice of the Isle of Man granted an application from the Isle of Man Financial Services Authority for an inspector to be appointed to investigate the Eco Resources Fund PCC plc.

Paul Shimmin, of Shimmin Wilson & Co.  was duly appointed as inspector of the Eco Resources Fund. Shimmin will also investigate the manager, administrator, and custodian of the fund: Premier Group (Isle of Man) Limited, Moore Fund Administration (IOM) Limited, and Kleinwort Benson (Guernsey) Limited.

Also on 16 December 2016, Jamie Sutton, a director of the Eco Resources Fund, issued the following letter to shareholders in the fund:

16th December 2016

Dear Shareholder,

The Eco Resources Fund PCC plc (the “Fund”)

Further to my letter dated 4th November 2016, I can now confirm that on 16 December 2016 the High Court of the Isle of Man appointed Mr Paul Shimmin of Shimmin Wilson & Co to act as an Inspector to the Fund pursuant to section 5 of the Companies Act 1974 and section 16(1)(a) of the Collective Schemes Act 2008.

Enclosed with this letter is a copy of the Court Order.

The Fund did not oppose the appointment of Mr Shimmin and its Board will work with him over the coming months to assist him in successfully concluding his duties as inspector.

The Isle of Man Financial Services Authority has issued a public statement on the appointment of Mr Shimmin which can be accessed on their website www.iomfsa.im.

Should you have any questions in relation to this information, please either contact your financial adviser ro the Manager of the Fund by telephone +44 (0) 1624 699677 or by email [email protected]

Yours faithfully

Jamie Sutton
Director

 

As a reminder, here’s a diagram of the investment structure, featuring some of EcoPlanet Bamboo’s various subsidiaries:

This investment structure is taken from The Eco Resources Fund report and financial statements to 31 December 2014 – before EcoPlanet Bamboo expanded to Ghana. It may have become more complicated since then.

The Eco Resources Fund 2014 accounts describe the following transactions:

On 19 October 2012 the Company issued participating redeemable preference shares to EcoPlanet Bamboo Central America LLC (“EBCA”) as part of a non-cash transaction whereby;

• EBCA was issued with 2,418,000 participating redeemable preference shares issued at $1.00 in the Company split evenly between the Premier Sterling, Premier US Dollar and EcoEarth Sterling Sub-Funds;
• The Company acquired 2,418,000 participating redeemable preference shares issued at $1.00 in ERF;
• ERF acquired $2,418,000 of 12% Loan Stock issued by EBIOM;
• EBIOM acquired a 100% holding in EBCA IV from EBCA at a cost of $2,418,000.

On 30 December 2013 the Company issued participating redeemable preference shares to Ecoplanet Bamboo Central America (EBCA) as part of a non-cash transaction whereby;

• EBCA was issued with 18,190,000 participating redeemable preference shares issued at $1.00 in the Company, all issued by the Eco Resources US Dollar Sub-Fund;
• The Company acquired $18,190,000 worth of participating redeemable preference shares in ERF;
• ERF acquired $18,190,000 of 12% Loan Stock issued by EBIOM;
• EBIOM acquired a 100% holding in EBSA II from EBCA at a cost of $3,190,000 and EBCA IV acquired 867 hectares of planted land at Rio Kama from EBCA at a cost of $15,000,000.

New Earth Solutions: Another Premier Group fiasco

The Premier Group’s involvement in EcoPlanet Bamboo isn’t the only investment it has been involved in that has gone awry. In June 2016, The New Earth Group of Funds, went into liquidation.

Here’s how Jamie Sutton, a director of the Premier Group (Isle of Man) and the Eco Resources Fund, described the structure of the New Earth Solutions Fund in a 2011 interview with hedgeweek.com:

The New Earth Solutions Recycling Facilities Investment Sub-Funds are three sub-funds denominated in sterling, US dollars and euros. They are sub-funds of The Premier Investment Opportunities Fund Protected Cell Company, a qualifying type Experienced Investor Fund complying with the requirements of the Isle of Man Collective Investment Schemes (Experienced Investor Fund) Regulations 2010.

The fund is structured as an open-ended investment company, incorporated in the Isle of Man and is available only to qualifying investors. As a protected cell company, under Isle of Man law the assets attributable to each New Earth Solutions Recycling Facilities cell (of which the New Earth Solutions Recycling Facilities Investment Sub-Fund forms part) are only available to the creditors of that cell.

New Earth Solutions had an £80 million waste management contract with Scottish Borders Council to build a Mechanical Biological Treatment. The blog Not Just Sheep and Rugby has been following the unravelling of this story of this failed investment scheme in all its gory detail. It’s well worth a read.

In 2012, New Earth Solutions persuaded Scottish Borders Council to amend the contract. Here’s how Not Just Sheep and Rugby reports the change in its most recent post:

The company told their local government clients in early 2012 that NES could no longer obtain funding for the construction of a stand alone Mechanical Biological Treatment [MBT] facility at Easter Langlee, Galashiels without the inclusion of the company’s untried, useless Advanced Thermal Treatment (ATT) technology – a process supposed to produce energy from waste – in the deal.

The result? “The NES Group is now in administration with investors losing many millions of pounds.”

The latest on the Eco Resources Fund PCC

In November 2016, REDD-Monitor reported that the Eco Resources Fund was going into liquidation. On 19 December 2016, the Fund held an Extraordinary General Meeting which included a vote on a resolution about whether the Fund should be wound up.

The vote went against the resolution. The directors of the Eco Resources Fund took this as a “clear indication of a vote of no confidence in the Directors of the Fund” and resigned.

Three new directors have stepped up to take over as directors: John Charles Bourbon; Richard Robinson; and Troy Douglas Wiseman. Bourbon is a director of the Premier Group (Isle of Man) Limited. Wiseman, of course, is the the co-founder and CEO of EcoPlanet Bamboo.

Another Extraordinary General Meeting will be held on 16 January 2017 for Premier Group Distribution Inc (the “Management Shareholder”) to decide whether to appoint these three as directors.

Premier Group Distribution Inc was registered in January 2009 in the British Virgin Islands. The company’s agent was the Panamanian law firm, Mossack Fonseca. Premier Group Distribution Inc appears in the The International Consortium of Investigative Journalists’ Panama Papers. One of the beneficiaries of Premier Group Distribution Inc is Michael Richardson, a director of the Premier Group (Isle of Man) Limited.

Meanwhile, with the Premier Group (Isle of Man) Limited in liquidation, the Eco Resources Fund received a demand for fees amounting to nearly £2.4 million from the liquidator. In a letter to shareholders dated 20 December 2016, Eco Resources Fund director Jamie Sutton explains that, “The Fund is not in a position to settle these fees.”

A 19 December 2016 Report from the directors of the Eco Resources Fund states that the Fund has cash assets of £23,7166, and owes a total of more than £2.7 million. The Eco Resources Fund has 188 shareholders, who between them have more than 33 million shares in the Fund.

Here’s the Directors’ Report, followed by Sutton’s letter to shareholders.

The Eco Resources Fund PCC plc (the ‘Fund’)

Directors’ Report

19th December 2016

Introduction

This report summarises the background of the Extraordinary General Meeting at 9am on 19th December 2016 for the Members of the Fund to consider and vote on a resolution to wind-up the Fund. This report will be made available to all in attendance at the meeting and afterwards, a copy will be sent to all shareholders and creditors.

Background

We wrote to shareholders on 8th June 2015 to announce that due to the number of redemption requests being made, the Fund had been closed to redemptions to help safeguard the interests of all investors. At the same time we announced that a number of alternative capital raising opportunities aimed at meeting the running costs of the plantations were actively being pursued.

Unfortunately, since then an acceptable funding solution has not been successfully concluded and as noted in our more recent letters, absent a funding solution there is no prospect of the Fund continuing any further.

Since 2015, the directors and a number of the service providers to the Fund agreed to defer their fees to preserve cash resources. All concerned agreed that their fees and invoices were not due for settlement before 31st October 2016.

The Directors therefore set a deadline of 31 st October 2016 to conclude any funding solutions, and when this deadline passed, resolved at a board meeting on 1st November that, with regret, had no option but to convene the meetings necessary to wind-up the Fund due to its financial position.

Current Financial Position

A summary of the current financial position of the Fund at 3 rd November 2016 is as follows:

Liquid Assets – Cash – £23,871.66

Total Creditors – £2,731,614.84

In addition there are 33,766,977.94 shares in issue to 188 individual shareholders.

Finally, the Fund owns 100% of the issued share capital of ERF Limited. In turn ERF Limited owns 2,000 shares of EcoPlanet Bamboo (IOM) Limited (‘EBIOM’) (representing 100% of its shares in issue) and is owed around $51m by EBIOM.

EBIOM in turn owns two Delaware Registered bamboo plantation owning companies EcoPlanet Bamboo CA IV, LLC and EcoPlanet Bamboo SA II, LLC. The financial position of EBIOM and the Delaware companies is not known at this time. ERF Limited has £7,626.98 in cash and approximately £1,500 of liabilities.

Recent Development

On 30th November 2016, the Fund’s manager, The Premier Group (IOM) Limited (in liquidation) (“PGIOM”) went into liquidation. The Fund has recently received a Statutory Demand from the Joint Liquidator of PGIOM for the fees that it is due amounting to £2,388,781.11. The Fund is not in a position to settle the amount due and the Joint Liquidator has been informed.

 

 

20th December 2016

Dear Shareholder

The Eco Resources Fund PCC plc (the ‘Fund’)

Further to my letter dated 25 th November I am writing to update you with the results of the Extraordinary General Meeting (‘EGM’) of the Fund and the course of action the Directors have subsequently taken.

EGM

The EGM took place at 9am on 19 th December as advised. A Directors’ Report was tabled at the EGM setting out the background of events that resulted in the convening of the EGM, the financial position of the Fund and its subsidiaries as at 3rd November 2016 and a recent event in relation to the Manager of the Fund.

A copy of the Directors’ Report is enclosed with this letter. It should be noted that the cash balance of the Fund reported on 3rd November has since reduced to £12,545.73.

A poll vote was conducted of the extraordinary resolution for Members to consider if the Fund should be wound up. Votes were cast representing approximately 16.8m of the 33.7m participating shares in issue, the result of which was as follows:

Votes cast For the Resolution – 2,675,413.99 (15.89%)
Votes cast Against the Resolution – 14,159,810.46 (84.11%)

Statutory Demand

As referred to in the Directors’ Report, the Manager of the Fund, The Premier Group (Isle of Man) Limited (In Liquidation) (‘PGIOM’) went into liquidation on 30th November 2016. The Fund has recently received a Statutory Demand from the Joint Liquidator of PGIOM for the fees that it is due. The Fund is not in a position to settle these fees and the Joint Liquidator has been informed.

Next Steps

The Directors of the Fund have concluded that the overwhelming vote against the resolution is a clear indication of a vote of no confidence in the Directors of the Fund. This leaves the Directors in an untenable position and they have therefore each tendered their resignations from the Fund board with immediate effect.

Prior to resigning the Directors received an indication from three individuals, each of whom have expressed an interest in replacing the existing directors to convene a new Fund board. They are aware of the Fund’s financial affairs and the Statutory Demand received from the Joint Liquidator of PGIOM.

The three individuals concerned are:

John Charles Bourbon;
Richard Robinson; and
Troy Douglas Wiseman.

The responsibility of convening a board of Directors falls to the Management Shareholder of the Fund, being Premier Group Distribution Inc (the ‘Management Shareholder’). The Directors have called a further extraordinary general meeting for the Management Shareholder to consider resolutions regarding the proposed appointment of Mr Bourbon, Mr Robinson and Mr Wiseman. Enclosed with this letter is Notice of the EGM scheduled to take place at 9am on 16 th January 2017 at Burleigh Manor, Peel Road, Douglas, Isle of Man. Participating shareholders of the Fund have the right to attend the EGM, but do not have the right to speak or vote at this meeting.

If you or if you know of anybody who is suitably qualified who would be interested in being considered at the EGM to be appointed to the Board of the Fund, please provide a written expression of interest to [email protected] including a signed letter consenting to be appointed along with a current biography.

Finally, the Directors would like to take this opportunity to thank all service providers for the support that they have provided to the Directors over recent years, and wish the future directors every success in finding the right solutions for the Fund in the best interest of its shareholders.

Yours faithfully

Jamie Sutton
Director