The FMA wants to make sure Forestlands has established a proper and fair process for distribution to investors. Source: Stuff NZ
The Serious Fraud Office of New Zealand is looking at a group of forestry investment companies that owe investors NZ$18 million.
In March, the investors’ money was put into a trust by Motueka-based Forestlands after discussions with the Financial Markets Authority (FMA).
Investors in the Forestlands’ group of investment companies had been waiting for the return of their money since Forestlands sold its Hawke’s Bay and Wairarapa forests for an undisclosed price to a foreign buyer in September.
Forestlands’ website tells visitors: “Under section 48 of the Financial Markets Conduct Act we are not currently offering any new investments at this stage, and nor will we be in the immediate future and formally withdraw any previous suggestion that we may be.”
Some complained to the FMA, that said: “We have identified NZ$18m which Forestlands say is to be paid to all its investors.
“That money has been placed in a trust account after our discussion with a Forestlands director.
“It will remain in trust pending further inquiry.”
Recently the FMA said it has since referred some matters to the Serious Fraud Office.
The NZ$18m remained in trust, earning interest, while the FMA continued its inquiries.
Investors in the 18 investment companies which made up the Forestlands group had been told Forestlands NZ was “in the process of finalising all pay out distributions for all shares” and to expect cheques in March or April.
The investors owned non-voting “class B” shares in the Forestlands investment companies, which were created between 2000 and 2010.
An investigation began into the Forestlands companies in late February, after alerts from investors, and on March 2 FMA spokesman Andrew Park said: “We are aware of Forestlands, they have not filed financial statements for the last two years.
“We have also received a small number of complaints from the public.
“We share investors’ concerns about the lack of information being provided and we have been talking with the firm about these issues.”
The FMA said it was not its role to determine how best to allocate the company’s funds. But so far, it had not received a satisfactory response from the director to questions about this.
“We want to ensure that Forestlands has established a process for distribution that is proper and fair for all investors.
“We cannot provide any further information at this time.”
Attempts to contact Forestlands NZ’s sole director, and co-owner, Rowan Charles Kearns from Motueka, have been unsuccessful.
In September, Forestlands NZ, and 18 other “associated companies”, were the vendors of eight tracts of forest in Hawkes Bay and the Wairarapa to New Forests Australia New Zealand Forest Operating Fund 2.
The sale to the fund, which manages forestry investments for overseas super funds, was approved by the Overseas Investment Office, but the sale price was kept confidential.
One frustrated investor, who did not want to be named said: “I haven’t been sent anything, I get all the info off their website.
“One minute they say all forests are being sold and we can reinvest, then it says we can’t reinvest, then it says something about Financial Markets Authority says they are not allowed to make more offers.”
