At the beginning of December 2015, Troy Wiseman was in Paris. The CEO and co-founder of EcoPlanet Bamboo was there as part of the Nicaraguan government delegation to COP 21, the UN climate change negotiations. Wiseman’s Paris trip came just a few days before Wiseman wrote to the people unfortunate enough to have invested in his company’s “Bamboo bonds” to let them know that their investment had gone pear-shaped.
While he was in Paris, Wiseman took part in the Global Landscapes Forum, a huge event that has taken place during the UN climate negotiations since 2013. Wiseman spoke briefly about EcoPlanet Bamboo’s plantations in Nicaragua. Here’s his presentation:
Wiseman took part in an event consisting of a series of presentations about Initiative 20×20. Supported by the World Resources Insistute, 20×20 aims to “restore” 20 million hectares of “degraded lands” in Latin America and the Caribbean by 2020. EcoPlanet Bamboo has said it will invest US$180 million in 20×20.
During his presentation in Paris, Wiseman states that,
“We haven’t taken any outside capital, other than our own capital. And, er, and what I’d say, er, it’s, we did an institutional debt deal with, er, with, er, really a Wall Street fund.”
We were recently informed that although the Eco Resources Fund Board is currently in due-diligence with multiple institutional funding partners they do not expect their first closing to occur before December 31 st 2015, the date they had agreed upon to make the final redemption payments and interest payments.
So, er, no “institutional debt deal” and, er, no “Wall Street fund”.
EcoPlanet Bamboo (UK) Ltd was the company that raised US$12 million from sales of “Bamboo bonds”. Troy Wiseman has been the company’s sole director since October 2013, when Terry Cox resigned as director. Cox was also a director of Property Frontiers, one of the companies that promoted investments in EcoPlanet Bamboo (promising “Returns up to 895%”).
EcoPlanet Bamboo (UK) Ltd’s accounts up to 31 July 2015 include the following statement about EcoPlanet Bamboo (UK) Ltd’s investment of £3,731,437:
The investment relates entirely to investment in its subsidiary EcoPlanet Bamboo CA II, LLC, a company organized in the United States of America. The Company holds 100% of the share capital in the subsidiary. The subsidiary owned and operated commercial bamboo plantations in Nicaragua until 19 December 2013 when the subsidiary sold its entire interest in the plantations in exchange for $15 million loan notes. Subsequently on 7 August 2015 EcoPlanet Bamboo CA II, LLC received full payment of the loan notes by receiving 6,479,933.953 shares of The EcoResources Fund, a fund that is traded on the Channel Islands Exchange.
A year later, in mid-July 2016, the Isle of Man Financial Services Authority appointed Gordon Wilson of CW Consulting as controller of Eco Resources Fund.
On 4 August 2016, Wilson produced a report that, “expressed significant concerns as to the solvency and governance” of Eco Resources Fund. His report concluded that:
The role played by all people and functionaries in the structure should be reviewed.
On 8 March 2017, Wilson sent the following letter to shareholders:
8th March 2017
The Eco Resources Fund PCC plc (the ‘Fund’)
Further to my appointment as controller of the Fund on 22nd December 2016, I am writing to update you on the current situation.
In the attached letter from the Fund on 20th December 2016, you were informed that the Fund’s directors had tendered their resignation and convened an extra ordinary general meeting for the appointment of three new directors. In mid-January 2017, shortly before the scheduled meeting, the proposed three new directors withdrew their willingness to act and as there were no willing replacement directors, no resolutions were passed. As a result, the Fund remains without any directors at this time.
The financial position of the Fund has not changed materially since I took over as controlled and it remains almost as described by the directors in the attached letter.
In mid-January, I attended a meeting with Mr. Troy Wiseman in London. Mr. Wiseman informed me at that meeting that Sustainable Asset Lending LLC (“SAL”) had foreclosed on the shares in the bamboo plantation companies which were formerly owned by the Fund’s subsidiary, Eco Planet Bamboo (Isle of Man) Limited.
As such, per Mr. Wiseman, the Fund had no remaining interest in the Bamboo plantations.
Mr. Wiseman indicated that the Fund might be able to buy the plantations back however no progress has been made about that and in any event, the Fund lacks the resources necessary to make any purchase for the indicated amount of $10m. Accordingly other than the small balance of cash, the Fund has no assets of any realisable value.
In early February, the Fund’s manager, The Premier Group (Isle of Man) Limited (in liquidation) (“Premier”) (which had gone into liquidation in December 2016) informed the Fund that it was resigning as manager by reason of the Fund’s inability to pay past due management fees. Accordingly, the Fund does not have a manager.
Premier’s decision to resign impacted upon the tri-party agreement by which Moore Fund Administration (IOM) Limited (“Moore”) acted as the Fund’s administrator and the tri-party agreement is now considered terminated. As a result, Moore are no longer the Fund’s administrator. However, I have reached an understanding with Moore in the short term to provide a limited administration service to facilitate communications such as this.
Winding Up Hearing
Having considered my findings and having made their own assessment of the Fund’s situation and the events following from my appointment, the Financial Services Authority (“FSA”) applied to the court in the Isle of Man to wind up the affairs of the Fund in the public interest.
I attach a copy of the FSA’s claim form together with a formal notice of the winding up hearing which is to be held on the 16th March 2017. The notice will be published in a local newspaper on the 9th March 2017 and investors and creditors can attend the hearing on 16th March 2017 if they wish.
I consider it unlikely that investors will see any return on their investment in the Fund and creditors are unlikely to receive any distribution either. Whilst I appreciate that this is not the outcome that you expected or hoped for when you invested into the Fund, in light of the financial difficulties dating back almost 2 years, I don’t expect that that this news will come as a surprise to you.
I hope that through liquidation, a fuller explanation of what has happened here might be forthcoming and that any necessary action against those involved in the affairs of the Fund might be taken.
The Eco Resources Fund PCC plc (the Fund)
So when Wiseman was in Paris waffling about an “institutional debt deal” with a “Wall Street fund”, the reality was that the Fund behind his company was in “financial difficulties”.
Insurmountable liquidity problems
On 16 March 2016, a judge in the High Court of Justice in the Isle of Man ordered the Eco Resources Fund to be wound up. The judgement is available here.
The judgement includes a summary of Eco Resources Fund’s problems written by Claire Louise Whitelegg, Deputy Director, Fund and Investment Services Team, Isle of Man Financial Services Authority:
a. the Defendant has been left with a management vacuum, exacerbated by the withdrawal of its functionaries;
b. the Defendant has very considerable – apparently insurmountable – liquidity problems which has been the position for some time;
c. decisive action is required so as to protect the interests of third parties, investors and creditors;
d. historically there have been restrictions on information flows and, in the view of Mr Wilson, “a catastrophic mismatch between liquidity terms offered to investors versus the liquidity associated with the underlying assets class”;
e. the Defendant is in breach of the Companies Acts and continuing (multiple) breach of the Collective Investment Scheme (Qualifying Fund) Regulations 2010 – including the lack of audited accounts for the period since 31 December 2014;
f. redemptions have been suspended since April 2015 and there must be serious concern as to the recoverability of the Defendants (sic) remaining asset;
g. there is confusion as to whether the Defendant will be able to recover anything from its investments due to security having been apparently granted to a third party (SAL) over the underlying bamboo plantation assets;
h. it is desirable that insolvent companies be wound-up in order that the causes of insolvency are determined. The circumstances which have caused or contributed to the Defendant’s present situation require investigation. In the absence of directors, the Liquidator will be able to assist the Inspector as required and will likely form his own view;
i. mindful of its regulatory objectives, the FSA has determined that the application to wind-up the Defendant best achieves the public interest in investor protection and the maintenance of confidence in the Island’s financial services and its development as an international finance centre.
The judge, David Doyle, ruled that the Eco Resources Fund should be wound up and Gordon Wilson was appointed as liquidator. Doyle commented that,
The Defendant has no officers. It has no directors. It has no secretary. It has no manager. It has no administrator. It has no custodian and it appears that a statutory demand in the region of some £2.4 million has not been paid. There are also serious concerns in respect of arrangements with Sustainable Assets Lending LLC and how the Defendant has arrived at the position it is now in.