Small investors complain as New Earth lenders seek exit

And, small investors have made complaints to the Financial Ombudsman Service over advice they received over investing in New Earth.

In a letter to shareholders last week, director Michael Richardson confirmed the New Earth fund lenders had rejected a ‘five-year business plan’ in the autumn of 2015 and are close to negotiating an exit.

The New Earth Recycling Fund, which has not prepared financial statements since the year ended 31 March 2014, and failed to stage an AGM in 2015, is currently in breach of the Isle of Man Companies Act, according to the letter.

New Earth has a trail of upset private shareholders, who have been unable to redeem their investments since the Fund was ‘temporarily’ suspended in 2013.

Letsrecycle.com can confirm that a number of shareholders have since complained to the Financial Ombudsman Service claiming they had received poor investment advice over investing in the fund.

One shareholder – a Mr S – is to be reimbursed by Plymouth-based MFS Partnership after investing over £200,000 in New Earth in 2012. He was left unable to access his pension savings.

Another complainant, Mrs D, received advice from Speers and Associates between January 2012 and January 2013 to invest £195,000 in a student accommodation fund and the Premier New Earth fund. She has since been repaid £150,000 in compensation by the advisor.

In October, Ms B made a complaint to Citimark for advising her to invest £30,000 in a New Earth sub-fund in 2008. And, a Mrs C complained to the Ombudsman over advice she received from Synergie Financial Planning Limited to invest 25% of her personal pension in three unregulated investment schemes, including the Premier New Earth funds.

Since January, a further three shareholders in the company have launched complaints with Speers and Associates over advice they received.

‘Concern’

Over the last six months, New Earth management has deferred the filing of the accounts of the companies on two occasions while “restructuring and exit routes have been being progressed”.

In his letter to shareholders, Mr Richardson said: “The Directors do appreciate that the lack of clarity is of concern to shareholders, but they firmly believe that this course of action offers the most favourable outcome for shareholders. It is therefore important that this course of action is progressed in the correct manner.”

“The Directors do appreciate that the lack of clarity is of concern to shareholders, but they firmly believe that this course of action offers the most favourable outcome.”

---

Michael Richardson
New Earth Premier Funds director

He added that when negotiations on the control of the Fund and the companies are transferred to the developer, New Earth will share the “full ramifications” with shareholders in detail.

Avonmouth

There was further concerning news from Avonmouth, where Mr Richardson revealed a fire in December 2015 at New Earth’s mechanical biological treatment (MBT) plant had affected processing of refuse-derived fuel (RDF).

The blaze, which was contained, meant that supply of RDF to the company’s former gasification facility – now owned by Avonmouth BioPower – was interrupted with discussions ongoing over the “alleged consequences” to the latter’s business.

Dorset

Earlier this year, the Dorset Waste Partnership revealed plans to increase the amount of refuse it sends to New Earth’s Canford-based MBT plant, as well as transfer residual waste from Bridport to the firm’s Avonmouth facility (see letsrecycle.com story).