An Isle of Man qualifying fund, the Eco Resources Fund invested indirectly in bamboo plantations in Nicaragua and South Africa, via a special purpose vehicle called ERF Limited.
As a qualifying fund, which requires no regulatory pre-approval, Eco was available to ‘qualifying investors’ only and should not have been distributed to retail investors.
Nearly all of the investors who put their money in the fund would have done so on the recommendation of a financial adviser, which is the traditional distribution method for qualifying funds.
Liquidity issues
Eco had experienced liquidity issues since 2014 and tried to raise long and short-term financing.
However, as at 20 December last year, the fund had cash resources of just £12,545.73 and debts in excess of $2m.
Shareholders voted against liquidation on 20 December 2016, following which all three directors of the fund resigned as they felt the result was a vote of no confidence.
The Eco Resources Fund was set up in 2012 by The Premier Group, the company behind the stricken New Earth Group of Funds that were would up by the Isle of Man Financial Services Authority (IoMFSA) in July 2016.
The Premier Group resigned as manager of Eco on 7 February 2017.
Court orders
In addition to granting IoMFSA’s wind up application on Thursday, the high court appointed Gordon Wilson of CW Consulting as official receiver and provisional liquidator of the Eco Resources Fund.
A meeting of the creditors and contributors of Eco is to be held within eight weeks.
Wilson assumed control of the affairs of Eco on 22 December, having been appointed as advisor to the fund in June 2016.
