MORE than £50million has so far been paid out to people who sunk their money into an “illegal” Bournemouth-based investment scheme involving Costa Rican forestry, a report has confirmed.

Ethical Forestry collapsed in 2015 and is still the subject of an investigation by the Serious Fraud Office.

The company, which was based in Holdenhurst Road, attracted around 3,500 investors, many of whom ploughed in money from their self-invested personal pensions (SIPPs). Some invested after being cold-called by sales people.

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Many were told they owned trees and cropping rights and were even sent GPS coordinates for trees which they do not in fact own, liquidators have said.

The latest liquidators’ report says the Financial Services Compensation Scheme has compensated around 2,181 investors to the tune of £50.7m.

Another 78 creditors have lodged claims totalling £28.09m, with an unknown number of claims still to come in.

Liquidators Shane Biddlecombe, Gordon Johnston and Mark Wilson, of Fortus Recovery Ltd, wrote: “Many investors were led to believe by the company and its directors that they had ownership of trees and cropping rights in relation to trees in Costa Rica and were even given GPS coordinates to their ‘trees’.

“However, it is clear that these rights have not been given as they were not capable of being granted under Costa Rican law.

“Accordingly … this investment scheme is being investigated from a criminal point of view by the authorities.

“For further clarification this investment scheme was categorised as an unlawful collective investment scheme (CIS) by the Financial Conduct Authority, now the Financial Services Authority, and is subject to ongoing investigation by the Serious Fraud Office."

The report said liquidators were continuing to consult solicitors in Costa Rica and the UK about the best way to take control of the Ethical Forestry group of companies in Costa Rica and sell their assets.

Liquidators were also consulting lawyers about claims against the directors of Ethical Forestry Ltd.

The liquidators said the Financial Services Compensation Scheme had paid out £50.7m and would rank as a creditor in the liquidation process, taking the place of the investors who had been compensated.

They added: “At this stage we are unable to confirm whether there will be sufficient funds realised after defraying the expenses for the liquidations to pay a dividend to unsecured creditors, although it is anticipated that following a successful recovery of the Costa Rican assets that there will be a distribution to creditors of Ethical Forestry Ltd.”

Creditors who have not already been compensated might be able to claim compensation if they acted on advice from an independent financial adviser.

Otherwise, they would be an unsecured creditor and should submit proof of debt to the liquidators.

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Three directors of Ethical Forestry – Matthew Pickard, from Poole, Stephen Greenaway, from Bournemouth, and Paul Laver, from Ferndown – were banned as company directors for six years in 2019.

The government said they withdrew £19m from the company through loan accounts, of which £7.2m was taken out after HMRC began investigating the business’s tax liabilities.

In an update at the end of January, the Serious Fraud Office (SFO) said: “The investigation into Ethical Forestry is ongoing and being progressed whilst social distancing measures are in place.”

It urged investors who had not already completed an investigation questionnaire to visit sfovla.egressforms.com/

The SFO said the investigation was still live and it had nothing to add.

This article was originally featured in our sister title, the Bournemouth Echo.