An island-based investment fund manager and promoter and its allied funds have collapsed, leaving thousands of investors worldwide facing little prospect of recovering their investments totalling hundreds of millions of pounds, the Examiner can reveal today.
Premier Group (Isle of Man) Ltd, based at Ridgeway Street, Douglas, was established in 2007 and latterly focused on renewable and green investments including recycling plants in the UK.
But as far back as 2010 investors had been raising concerns about the fund group it succeeded, also named Premier Group IoM, which was launched in 2001 and had seen funds that it promoted grow to £500m but closed to new investments in 2005.
The Premier Shareholders Group accused the Manx government of failing to protect investors after a fund marketed as ‘low risk’ was subjected to a market value adjuster. That 2001 company was not regulated by the island’s Financial Services Authority.
But now the 2007 company that succeeded it – which was licensed and regulated by the FSA as both a fund manager and promoter – has been wound up at an extraordinary general meeting and Craig Mitchell and David Craine of Brown Craine and Co appointed joint liquidators.
It was resolved by the shareholders that the company be wound up voluntarily as it could not continue in business due to reduced sources of income.
However, directors Michael Richardson and Jamie Sutton declared the company would be able to pay its debts in full within 12 months.
Joint liquidator Craig Mitchell told the Examiner: ‘The directors have reviewed the company’s financial position and they consider it is solvent and they are saying there are enough assets within the company to pay all the creditors in full.’
Mr Mitchell said it was an unusual situation as the FSA would be petitioning the court for the liquidation process to be carried out under the supervision of the court.
Premier Group (Isle of Man) Limited was the appointed manager of the New Earth Group of Funds, which went into liquidation in June and an official receiver appointed following an application by the FSA.
The New Earth group, comprising New Earth Recycling and Renewables (NERR), Premier Investment Opportunities Fund and Eclipse Investment Fund, invested in the development and ownership of recycling facilities in the UK.
Premier Group (Isle of Man) directors, actuary Mr Richardson and John Bourbon, a former head of supervision at the island’s Financial Supervision Commission, were also directors of the New Earth Group companies.
NERR and its two feeder funds, had a valuation of $292.22m and a total of 3,249 investors, the majority of whom are unlikely to get much of their money back.
The higher risk nature of the funds was explained in the funds’ offering documents. ‘Substantial recovery of value from those investments may be unlikely,’ says the FSA.
The FSA filed a claim to wind up the three funds after two other linked companies, New Earth Solutions Group and New Earth Solutions Facilities Management, in which NERR was the majority shareholder, were put into administration in the UK.
New Earth Solutions was subsequently sold, safeguarding 143 jobs at the five waste plants it operated.
In another move, the High Court in Douglas, at the request of the FSA, last month appointed an inspector to investigate the affairs, and report on certain matters, concerning Eco Resources Fund.
That fund was set up by Premier Group in 2012 to invest in bamboo plantations and was also described in its offering documents as being high risk.
The court-appointed inspector is to also investigate the affairs of the manager Premier Group (Isle of Man) Limited; the administrator (Moore Fund Administration (IOM) Limited; and the custodian Kleinwort Benson (Guernsey) Limited about certain matters related to the fund.
An adviser previously appointed to the fund by the FSA was made into a controller following the resignation of the board of directors.
Eco Resources Fund had a total of 189 investors and a valuation of $61m.
The fund, which had a complex corporate structure including a minority shareholding in a special purpose vehicle created for the fund named EcoPlanet Bamboo IOM Ltd, promised a ‘guaranteed’ return on investment.
Launching EcoPlanet Bamboo IOM Ltd in 2012, The Premier Group (Isle of Man) Limited described itself as the ‘successor’ of the fund group established in 2001.
A retail investor who purchased shares in the above funds could only have done so after taking advice from a financial adviser.
Michael Weldon of the FSA said that any investor who felt they had been mis-sold investments should consider making a formal complaint to their financial adviser.
* It has been suggested to us that the manner of our reporting in the above article may have given the false and incorrect impression that EcoPlanet Bamboo Group LLC (a Chicago based entity, trading as EcoPlanet Bamboo) is related to EcoPlanet Bamboo IOM Limited. For the avoidance of doubt, EcoPlanet Bamboo IOM Limited (the Isle of Man based entity) is not associated with EcoPlanet Bamboo Group LLC (the Chicago based entity), nor its subsidiaries. Further, neither Eco Resources Fund nor EcoPlanet Bamboo IOM Limited have any interest in EcoPlanet Bamboo Group LLC nor in any of its plantations. We apologise for any misunderstanding caused by the manner of our reporting.
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