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Ethical Forestry

The Ethical Forestry Group

The Ethical Forestry Group was an investment opportunity that appealed to many UK pension holders. The prospect of investing in a project that would benefit the planet, mixed with a touch of the exotic – the Group’s plantations were based in Costa Rica – was very tempting. 

It was sold as a safe, risk-free way of growing an existing pension pot and it’s easy to see how people were taken in. Unfortunately, it turned out to be yet another ethical investment opportunity that ended in disaster.

A green investment scheme gone wrong

Based in Bournemouth, the Ethical Forestry Group comprised of four different companies:

  • EF Forestry Management Limited
  • Ethical Forestry Limited
  • Ethical Forestry Holdings
  • EF Sales and Marketing Limited

Together, they owned 80% of the Costa Rican registered company Ethical Forestry SA, which in turn owned assets, plantations and a wood mill in Costa Rica. The remaining 20% was owned by Robert Brown, who was the on-site forester.

Despite investors being assured otherwise, Ethical Forestry was a high-risk unregulated investment scheme. Approximately 3,500 savers were persuaded to invest a minimum of £18,000 each into the project’s Costa Rican tree plantations with promised returns of up to £104,000 over a 12 year period. 

The total amount invested is believed to be around £70 million from various sources. £11 million was invested in cash, £14 million through 10 Self-Invested Personal Pension (SIPP) providers plus an estimated £45 million through Liberty Sipp alone.

Sadly for those who invested, the project quickly hit rocky ground. The liquidator’s progress report showed the scale of the disaster with interconnected company debtors of £9.5 million, a myriad of directors’ loans, an HMRC bill of £21 million and multi-million balance sheet that was all but worthless. 

To make matters worse, it’s apparent the three company directors paid themselves an eye-watering £14.2 million over a two year period with one – Matthew Pickard – spending millions on his new Bournemouth home in 2013. This triggered an investigation by the Serious Fraud Office (SFO) who were concerned by the large sums of money going to directors in the wake of a significant revenue drop for the organisation. In 2016, the Financial Conduct Authority (FCA) also investigated claims the group were operating outside of their parameters of authority.

A sadly familiar chain of events

Like many other Unregulated Collective Investment Schemes (UCIS) it’s a sad story of investors’ hard-earned savings and pensions lost at the hands of firms and individuals putting personal gain before the needs of their clients. This included unregulated introducers such as Avacade, and also IFA firms like Solihull-based Shah Wealth Management and it’s appointed representative, Cherish Wealth Management.

It’s part of the emerging picture of SIPP providers, like Liberty Sipp, failing to undertake even the minimum of due diligence when accepting SIPP customers, or the high-risk assets pension holders found themselves investing in.

Despite facing the prospect of hundreds of claims from former clients who invested in Ethical Forestry, Liberty Sipp continue to protest their innocence. They claim they carried out extensive checks into the way the Ethical Forestry investment was structured before accepting any investments – time will tell if this is true or not.

In March 2017, the SFO opened a criminal investigation into Ethical Forestry Limited, encouraging members of the public who invested in these schemes to complete a questionnaire.

If you invested in Ethical Forestry or a similarly disastrous UCIS, or were persuaded to transfer your pension into a SIPP and lost money, the team at Beat the Banks are here for you. Call us on 0800 193 1234 for a free, no-obligation chat with one of our claims specialist who will assess your situation and explain how we can help.

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