How Sustainable AgroEnergy’s “green oil” investment in Cambodia fell apart

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This is a story involving a company called Sustainable AgroEnergy, a jatropha plantation in Cambodia, boiler room companies, retail investors asking where their money went, banks in Switzerland, Tanzania and the British Virgin Islands, a member of the House of Lords, and the Serious Fraud Office.

First a quick recap of last week’s post about Global Forestry Investments, because it was a footnote to that post that led me to Sustainable AgroEnergy. Andrew Skeene and Omari Bowers of GFI bought teak plantations in Brazil. Emerald Knight sold plots of land in the plantations to retail investors. The plots of land were held in trust by Title Trustees International, a subsidiary of Hutchinson & Co. Trust Company Limited. Many of the investors are now wondering where their money went.

Here’s the footnote to that post: The front page of GFI’s website features the logo of Thomson Reuters Point Carbon, with a note inviting readers to “Find out how we are working with Thomson Reuters Point Carbon Advisory Services.” Click on the link, and GFI explains that, “GFI Consultants Ltd is working with Thomson Reuters Point Carbon Advisory Services.”

Thomson Reuters has now closed down Point Carbon Advisory Services, but here’s a description from a 2010 job advert:

Point Carbon Advisory Services provides clients with customized and in-depth analysis on a wide range of carbon and energy issues. The Advisory team consists of around 25 consultants, including several of the leading experts in the global carbon market, and capitalizes on access to Point Carbon’s world class databases, models and networks.

Nelson Sam and James Whale worked together at Point Carbon Advisory Services. In November 2013, they set up a company together called City Advisory Ltd. Their timing was perhaps odd. A few months earlier, James Whale was one of four people in court, charged with fraud by the Serious Fraud Office.

All four were involved in a company called Sustainable AgroEnergy that had run an unregulated investment vehicle in a jatropha biofuel plantation in Cambodia. James Whale was former Chief Executive Officer in the company.

About 2,000 people invested their money. According to the Serious Fraud Office,

The value of the alleged fraud is approximately £23m and the offences are said to have taken place between April 2011 and February 2012.

Three others were charged: Gary West, Director and Chief Commercial Officer of Sustainable AgroEnergy; Stuart Stone, an Independent Financial Adviser associated with Sustainable AgroEnergy; and Fung Fong Wong the former Financial Controller of Sustainable AgroEnergy. They were charged with “offences of conspiracy to commit fraud by false representation and conspiracy to furnish false information, contrary to section 1 of the Criminal Law Act 1977″. West, Stone and Wong were also charged with “offences of making and accepting a financial advantage contrary to section 1 (1) and 2 (1) of the Bribery Act 2010″.

A first hearing took place in Southwark Crown Court on 7 October 2013, and the next hearing will be a case management hearing on 28 April 2014. The case is listed for trial on 22 September 2014. All four defendants were released on bail.

Sustainable AgroEnergy was formed in March 2009 and until February 2011 was called Carbon Credited Farming. In February 2010, the Ecologist magazine raised the alarm about the company’s jatropha plantations. The article focusses on the impacts that a large-scale expansion of jatropha plantations would have on land conflicts, food security and hunger in the Global South. Friends of the Earth International had published a report in 2011, titled “Jatropha: Money doesn’t grow on trees. Ten reasons why jatropha is neither a profitable nor sustainable investment”, and Action Aid continues to campaign on the impacts of biofuels on farmers and food security.

The Ecologist article mentions two companies that were acting as agents for Carbon Credited Farming and marketing investments in jatropha: Onyx World and Viceroy Invest. Both companies are registered in the UK. Onyx World is in liquidation, and Viceroy Invest is a live company.

The websites of both companies have disappeared. A copy of Onyx World’s website on archive.org dated 7 January 2012 reveals the company’s claims. “Tax free investment within a SIPP,” is the headline. Jatropha “could eradicate poverty, stop crude oil dependency and save the planet from the effects of global warming thus bringing you an amazing return on your investment”. Onyx World promised “massive 345% cash returns over the first five years – up to 93% a year”.

A 2009 Viceroy Invest brochure also makes claims of “Returns up to 93% a year”, “Guaranteed purchase contract”, and a “Highly ethical ‘green’ investment”. By 2011, in another brochure, Viceroy Invest had toned down its claims to “20% returns or more each year”.

In its 2011 brochure Viceroy Invest tells us that,

When you purchase a Green Oil or Agro-forestry Lease, you have legal entitlement to the land and trees for 45 years. You receive confirmation of ownership through the independent, UK-based Citadel Trustees Ltd (‘Citadel’) for the duration of the investment. They hold the land in trust throughout the 45-year lease.

Citadel Trustees is a subsidiary of Hutchinson & Co. Trust Company Limited. Citadel also holds the carbon credits that several boiler room companies scammed people into buying.

In its 2011 brochure, on a page titled “The Small Print”, Viceroy Invest tells us that,

Viceroy Invest Limited is not regulated by the Financial Services Authority and is not regulated to offer advice to the general public concerning any regulated or unregulated investment.

Which should have been (but obviously wasn’t) enough to scare off retail investors.

Many of the “investments” in Sustainable AgroEnergy’s jatropha plantation were through Self Invested Personal Pensions (SIPPs). According to a May 2012 article on New Model Advisor website,

A number of Sipp providers, agents and advisers are understood to have relied on due diligence on Sustainable AgroEnergy conducted by Citadel Trustees.

Peter Hutchinson, chairman of Citadel Trustees, told New Model Advisor that,

Citadel has never held itself out as being an expert in the field of sustainable energy projects and neither has it confirmed at any time that any firm, company or individual is entitled to rely on the due diligence information provided.”

In May 2011, Lord Laird of Artigarvan, who runs a PR company called Biscuit Public Relations, hosted a promotion in the House of Lords for something called “Sustainable Evolution”. On his website, journalist Andrew Drummond has a photograph of Lord Laird at the launch, shaking hands with James Whale, and with Gregg Fryett, the director of Sustainable AgroEnergy:

(An investigation by BBC Panorama journalists recorded Lord Laird on film agreeing to accept cash for questions in parliament. A separate investigation by Sunday Times journalists posing as consultants for a South Korean solar energy firm caught him agreeing to accept cash for questions. In December 2013, the Privileges and Conduct Committee of the House of Lords recommended that he be suspended from the House of Lords for four months.)

The Serious Fraud Office froze the assets of Sustainable AgroEnergy in February 2012. A report written by Mark Thompson of the SFO noted that Sustainable AgroEnergy continued selling investments up to February 2012, despite the fact that in June 2011, auditors had raised questions about,

“financial difficulties caused by the failure to plant sufficient jatropha trees to have any prospect of generating returns for investors.”

The Cambodia Daily reports that in his SFO report, Thompson wrote that Sustainable AgroEnergy had made payments amounting to more than US$5.7 million to bank accounts in Switzerland, Tanzania and the British Virgin Islands.

Gregg Fryett, director of Sustainable AgroEnergy, was arrested in Cambodia in March 2013 by Cambodia’s Anti-Corruption Unit. A year earlier, the chief inspector for the Forestry Administration in the northern Tonle Sap region made a complaint against Sustainable AgroEnergy’s local affiliate, International Green Energy, and another company Aphivath Meanchey for illegally clearing forest, according to an article in the Cambodia Daily.

Aphivath Meanchey is owned by Mao Malay, the wife of Ke Kim Yan Cambodia’s Deputy Prime Minister and former commander-in-chief of the Royal Cambodian Armed Forces. Sam Ourm, director of International Green Energy, told the Cambodia Daily that his company has a “handshake” agreement with Mao Malay and has paid US$1.3 million through a company called Phalla Development, which is owned by Hanh Chamrong, a general in the Royal Cambodian Armed Forces.

The plot of land is in Banteay Meanchey province in the north-west of Cambodia. Only about 300 hectares of a total of more then 6,000 hectares had actually been planted with jatropha trees by February 2012. No oil has been produced from the plantation. Ourm told the Cambodia Daily that International Green Energy does not own any land concessions in Cambodia. Ourm was arrested in January 2013 along with Soeun Denny, another US-Cambodian who worked for International Green Energy.

Fryett denies the fraud allegations. The Cambodia Daily reports him claiming that the project ran into problems planting jatropha trees and with its land ownership deal.

In February 2012, the London firm Chantry Vellacott DFK was appointed as administrator of Sustainable Agroenergy PLC and two related companies, Sustainable Wealth Investments (UK) Ltd, and Sustainable Growth Group (UK) Ltd. Adrian Hyde, an insolvency practitioner at Chantry Vellacott DFK told the Cambodia Daily that Sustainable AgroEnergy had sold investors 8,000 hectares of jatropha plantation in Cambodia. Hyde said that his firm had identified between £35 million and £40 million worth of investment.

The Serious Fraud Office advises anyone who invested in Sustainable AgroEnergy’s jatropha project to contact Chantrey Vellacott DFK:

If you are a creditor of any of the companies involved or have invested in them and want more information, please email Chantrey Vellacott DFK LLP with details of your enquiry at the following address: SAEEnquiries@cvdfk.com

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18 Comments

  1. As an Investor in Agroenergy I am naturally dismayed at having lost my investment. This article covers some of the ground of what is an extremely complex situation.I researched the company thoroughly before investing and am still trying to decide if it was badly run or just unlucky but I do not think it was an outright scam.It should be noted that Gregg Fryett has not been charged with any offence in the UK and is working hard from his Cambodian prison to try and recover investor value.
    From my perspective,Chantrey Vellacott have done very little to try and recover any value for the investors.

  2. I have just received a letter from ‘Highpoint Trustees Ltd’. Two points:

    1) It states that Highpoint Trustees is the new name for Citadel Trustees Ltd., as of 1st April. The reason given was the existence of another company with a very similar name.

    2) Eco-Synergies Nominees Ltd. is being wound up

    on the grounds that it would be in the public interest.

    The petition will be heard on 1st May 2014 and if granted, we will fully co-operate by handing over all carbon credits we currently hold to the Official Receiver, who shall thereafter be responsible for arranging the safeguarding of your carbon credits.

    Well, so much for the audit that Citadel was supposed to have been carrying out!
    I wonder what plans the Official Receiver has for the credits? Time will tell…

  3. I invested as transferred and amalgamated all my career pensions together over 100k have lost everything cannot believe it any investors pls help knew nothing about the returns or sipp though do now all too late also think Fryett
    Not necessarily totally guilty in all this

  4. Caroline, you have my sympathies – I only invested a moderate amount but obviously still dismayed at the loss. Agree that GF not totally at fault – a very complex situation – did you sign up with RL and have you signed up to CAG? Please let me know if I can offer you any assistance as my main objective is to try and help people like yourself.

  5. Caroline, I notice this web site does not publish email addresses so for your information mine is: weisskjd@btinternet.com

  6. Gary West is a total crook and he has robbed and cheated people in Indonesia for years, unfortunately the biggest mistake made by Fryett was not to have checked him out properly and he gave him a free hand….bad mistake

  7. I am also an investor who took advice from my F/A to transfer my pension into green oil. I am totally gutted that I have practically lost my life savings to what I can now only assume was a scam. My only slim hopes lie with R/L. one thing that is concerning me though is that the sipp provider continues to deduct their so called administration charges from my cash account. I feel this is unjust and wrong in view of the fact that there is a huge chance that my investment is unrecoverable. In my opinion this fee should be reduced to nil until the matter is cleared up. I would very much appreciate others comments

  8. I am not sure if my post got through , But does anyone know if it is legal for a sipp provider to charge fees whilst the investment company is in liquidation

  9. I am one of those investors who wanted to diversify and so I did not put all my SIPP into this investment. Some 9.5K so I am very sorry to all the people who have invested significant amounts in what is, by all accounts should have been a viable endeavour but has failed. So what happened, well I only have hunches based on limited information and my understanding (for what it is) on human psychology. I think Gregg Fryett was very possibly ‘out of his depth’ and entrusted significant financial control and management to others (very possibly the gentlemen who are on bail pending the September court case brought by the SFO on bribery charges) when he should have been in full control and I doubt he was. Hence ‘significant’ investor money was being siphoned off thus starving the company of any real cash flow necessary to being production. I have a hunch that there were significant amounts of money going to Cambodian officials and land registry documentation falsification! Can’t prove it and I doubt it can! Gregg Fryett may well have gone out to Cambodia and started to ask awkward questions and the way to ‘silence’ that line of enquiry is to throw him in chokey!! Which they did! So where is the money now? Well I suspect in Cambodia in untraceable bank accounts there and elsewhere globally, and it will never be recovered. Sorry, but I think that’s about it! Mr Fryett may be extradited to the UK to face the SFO or maybe left where he is in Cambodia, not sure on that, but I suspect he is lacking in ability rather than a out and out thief. As for the other gentlemen on bail, September will be an interesting month. I expect it will be a case of do the time, and then enjoy the money, if the SFO cant recover it that is! The really sad element in all this is it really should not of happened at all, with proper management the investment was, well not low risk, but given that the crop can do OK in reasonable climates such that Cambodia has, it should have produced a product. Oh yes, as for Citadel Ltd (subsequently changed their name, why one wonders??)there due diligence report must have been, shall we say, mistaken. They have some answering to do as well. Not sure what’s happening to there! As for my FA, they have been fined, struck off and well I don’t loose much sleep about that!

  10. Bryan, similar position to you and totally aligned with your comments. There is a glimmer of hope as the Management Receiver seems to have finally( After 2 years!!) acknowledged that there is value in the Cambodian Land. ( Something that Gregg has always maintained) Investors may not get much of their money back but at least there may be something being returned.

  11. i was advised by Stuart stone,that this was a good investment,he did this through a company called pengwern wealth management,moved my money from 3 separate pension schemes, into a sipp provider berkeley burke,who have taken about £800.00 in fees since it started,back in April 11.has anyone else dealt with these companies?

  12. yes berkeley burke was also my sipp provider . I Made an official complaint to them as to why they are still taking fees when my investment is in the hands of administrators and all but lost they investigated and told me that the sipp provider is within their rights. I INTEND TO TAKE IT FURTHER TO THE FINANCIAL OMBUDSMAN SERVICE. PLEASE PLEASE MAKE A COMPLAINT TOO they are well out of order in still taking fees

  13. i have also contacted ombudsman,give them all my paperwork,it is now over a year ago, not been given much info back, it seems like DELOITTE,IS THE COMPANY LOOKING INTO IT FOR THE (FSCS)financial services compensation scheme.

  14. I worked for an ifa providing sipps and the charges in my opinion for administration are ridiculously high. They are perfectly within their rights to keep taking it even if the investment is in administration or worthless and we had many clients, mainly who had invested in carbon credits, who complained to no avail. I personally think that the ifa should as a goodwill gesture not take any more fees but not many will do that. Please read fee agreements thoroughly and work out exactly how much you are paying in fees vs how much your investment is worth. They are all transparent now. I feel very sorry for those of you who have lost money and I you get some of it back and justice is done.

  15. its an absolute disgrace that my hard earned pensions savings is all but been devoured by greedy and heartless criminals. I invested £12,500 on the advice of my so called F/A. who according to him “had checked it out thoroughly” I now know that his main interest was lining his pocket with a fat commission along with several other firms involved in this scam. I will never trust a financial adviser again. The whole thing stinks of dishonesty and corruption

  16. D, I am gutted that you have possibly (- there is still some hope) lost your savings. As an experienced independent investor, I also thoroughly checked out this company before investing ( a larger amount than you) – shows that we can all make mistakes. A complicated situation and as yet there is no real evidence of a crime having been committed. There are good and not so good financial advisors but the best best person to manage your financial affairs is yourself.

  17. Thank you for your post Red Dragon. I will wait to see what happens with the redress situation. Its good to know there are some honest F/A,s still around.

  18. It seems quite a few companies involved are either changing their company names or ceasing trading which is basically an escape route to avoid paying out compensation.

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