Investors in collapsed biofuel firms facing more than £36m in losses were caught between the company’s appointed administrators and the group’s founder yesterday as the two parties clashed over the best way to try to recoup investors’ money.
In March, Money Marketing reported that Southwark Crown Court had issued a freezing order on assets held by Sustainable Growth Group, Sustainable Agroenergy and Sustainable Wealth Investments after a Serious Fraud Office request.
Around 1,500 people, mostly Sipp investors, are thought to have invested in the firms that, in turn, invested in Jatropha tree plantations in South-east Asia.
Ahead of a creditors’ meeting in London yesterday, SGG chairman and founder Gregg Fryett wrote to Chantrey Vellacott joint administrators Adrian Hyde and Kevin Murphy accusing them of selling down assets rapidly rather than attempting to complete plantation projects and return investors’ money.
A letter from Hyde responding to the claims was circulated to investors at the creditors’ meeting, claiming SGG and the two other firms held no rights over land sold to investors in Cambodia, despite having paid £3m for it. The letter also said an agricultural consultancy has concluded the land being sold was “wholly unsuitable” for growing Jatropha.
During the creditors’ meeting, Fryett told the administrator: “If you had done your job properly and secured assets and put the company in a trading position nobody would lose any money.”
But Hyde said: “There are no funds to plant this land. The cash is not there. The only money coming in is from the sale of land.”
Including proxy votes, proposals were passed to allow the joint administrators to continue to realise assets and wind up the companies if there are insufficient funds to pay creditors.