Gardaí are investigating a forestry investment company, which raised about €4.1 million from mainly UK investors in the past three years, amid suspicions it could be a pyramid scheme, the High Court heard.
Arden Forestry Management is involved in investment in forests in Ireland and registered here although most of its 132 investors are based in the UK.
Mr Justice Robert Haughton agreed on Tuesday to appoint a provisional liquidator on the application of the directors after hearing it was insolvent and unable to pay its debts.
The judge said arising out of the Garda investigation, there had been a blocking order on its main bank account with AIB in Ireland which meant it was effectively unable to operate.
An affidavit, written by Garret Hevey, one of Arden Forestry's directors, said that he and his fellow directors deny any wrongdoing. However, as the AIB account has been frozen, "the company has thus been put into an impossible position".
Land purchases
The document showed that Arden Forestry had acquired almost 72 acres of forest sites in Co Roscommon in recent years and that it was involved in advanced talks to acquire further lands which would potentially have increased forests under its ownership to about 375 acres.
However, as land purchases were taking longer than expected, Arden Forestry took a decision to invest some funds, under advice from a Gibraltar-based company, in Spanish property. Arden Forestry directors set up a firm in Dubai called GTD International, to buy properties in Spain.
Mr Hevey said that as only a person with a Spanish social security number can apply for a mortgage in that country, he personally bought properties using a 50 per cent mortgage and a 50 per cent deposit from GTD International.
“The intention was then to re-register the properties under a Spanish company once the purchase of the properties were finalised,” he said, adding that two such properties have not yet been transferred to a Spanish company.
“In circumstances where the properties in Spain were purchased from the funds of [Arden Forestry], the company is beneficially entitled to the properties.”
Transfers
To fund GTD International, funds were transferred away from a loan from Arden Forestry’s AIB account to
Noor Bank
in Dubai in February. The company also holds a bank account in
Baltikums Bank
in Estonia, according to the affidavit.
The judge said on Tuesday he was satisfied to appoint Declan de Lacy of PKF O’Connor, Leddy & Holmes as provisional liquidator and directed the appointment be advertised.
Earlier, Declan Murphy BL, for the directors, said it was just and equitable to appoint the liquidator as a consequence of the criminal investigation and was also necessary to allow the liquidator to get in and investigate what has happened.
While most of the investors are based in England, there is no doubt its centre of main interest was Ireland which meant the court had jurisdiction to appoint the liquidator, counsel said.
The case for the winding up was “compelling”, he added.
