Third Irish forestry fund.

ForFsSake

Shaun73 wrote: »

“Growing for the Future – A Strategic Plan for the Forest Sector in Ireland states:


"Over the years, timber prices world-wide have kept pace with inflation and most analysts agree that this scenario is likely to continue into the future.”


Veon States:


"Climate change is currently impacting timber flows across Europe. Unusually hot and dry summers in central Europe have promoted the outbreak of a particular pest and this has resulted in a glut of timber ...........

and

"the oversupply of timber in central Europe is resulting in more imports entering Britain from the continent. The effects of this are already visible in Ireland with reductions in timber prices being reported in the first half of 2019."


Hard to know what the truth is with contrasting views like these in play - possibly both could stand by their statements as not completely contradicting each other but still a difference between the two opinions.

dan1981

There seem to be contrasting communications in how it was communicated to shareholders and the media a few weeks back (and they were very happy to link to the 'summer bonanza/windfall article on their own website) and what appear to be actual figures and significantly disappointing returns. This seems hugely irresponsible to the verge of wondering if this was done deliberately to mislead, coupled with a refusal to inform shareholders, even now. The statements published on the site today are dated 28 June, over a month and a half ago.

ForFsSake

dan1981 wrote: »

There seem to be contrasting communications in how it was communicated to shareholders and the media a few weeks back and now. This seems hugely irresponsible to the verge of wondering if this was done deliberately to mislead, coupled with a refusal to inform shareholders, even now.

Was thinking the same Dan. Since I read about the poor returns of the 10 years funds several years ago I had assumed these were also going to be poor. So I only began to consider a decent return when I got the recent letter with its promising outlook.

Now it seems like the letter was just blowing smoke up my ass.

Tow

"Unusually hot and dry summers in central Europe have promoted the outbreak of a particular pest and this has resulted in a glut of timber ..........."

If they are cutting trees early in Europe it is all the more reason to wait the 10 years to cash in, as this reduces future supply.

And, if any country in Europe will be able to supply the UK without 'Brexit" tarifs it is going to be Ireland.

Shaun73

Tow

Agreed. The current "glut" is a ridiculous excuse. The long term trend in forestry and timber values is upwards.

antietam1

It is what is, nope that doesn't help.
Pretty sickening if your figures right lads.

LionelNashe

The scheme itself isn't bad - you wouldn't get 3.5% tax-free per annum on most investments, but the projections were obviously way over the top. The return will be less than 40% of the original projections in my case. Plus they had some nerve sending that letter.

Tow

LionelNashe wrote: »

3.5% tax-free per annum on most investments

Income tax free, there is still USC and PRSI to pay.

ForFsSake

LionelNashe wrote: »

The scheme itself isn't bad - you wouldn't get 3.5% tax-free per annum on most investments, but the projections were obviously way over the top. The return will be less than 40% of the original projections in my case. Plus they had some nerve sending that letter.

Isn't it less than 5% of what the prospectus stated - albeit before the 30 years is up?

IrForestryQ

Just looked at the accounts and there abysmal, what the hell is going on here!?

The trees are all reaching maturity now and in the next ten years! looks like we are getting shafted by veon.

And the reasoning for selling the fund is extremely presumptuous, first of all Brexit would only help our export to the UK as we are literally linked in borders and history we would get preference on trade and all the other countries would find it hard to compete with tariffs and transportation costs. We would make a killing on our fund when Brexit is concluded but I guess AXA will be making out with our potential returns now.

Secondly the climate change and pests issue is great for us as the so called glut of bad timber is only good for burning not structural, so our timber would demand a high premium for its grade.

It looks to me that they got in bed with this crowd and screwed us, the reasoning in the statement for the sale is moronic.

ForFsSake

I wonder if Ferghal O'Connor, who now works for Sunday Business Post, would be interested in following up his original story?

It's unlikely a quality journalist like himself would have written it if he wasn't given a hint from someone that all was looking good. Veon were also happy to link the article on their website (its still there!) adding credence to the positive letter they sent us in May. Quotes from the article include

"Thousands of small-time forestry investors across the country are set to receive a summer bonanza after the largest private forestry sale in Irish history ..........." and "The sale will see investors receive substantial returns on those original investments, it is understood."

I don't think he would use the phrase "it is understood" twice in a short article without having a source.

Full article link below

https://www.independent.ie/business/irish/forestry-investors-in-line-for-sale-windfall-38124848.html

Hatters

After Monday, if there is no “bonanza” he may well be... we were sold out... I’m so disappointed. Enjoyed these threads and the predictions and the hopefulness and now trying to prepare myself for ~€1000..

IrForestryQ

Looked further into this..

So if you take the net in the bank divide by 3000, roughly it comes out to 1300 per share over the 21 years thats an interest of about 3.3%.

The average inflation rate for the passed 21 years via CPI is 1.85% so 650 if you let that float just as cash it would be worth 393 after 21 years. So by deduction we have only realised a gain of 907 euro over the course of this fund. Hell if we would've put these monies in a bank savings account we would have been much better off!

Thats a profit of only 43.19 euro per year! And they have been using our moneys to fill there own pockets in fees and not to mention all the grant monies they have received over the years from the government.

This means for every year the trees have been growing they are worth less and less in this valuation Veon has sold to AXA.

Also is the LAND worth nothing!!!??? Land values are ALOT different than they were 21 years ago, but not based on these figures VEON don't seem to factor this into there sales price either!

That means there original prospectus quoting the 14.5% per annum potential was false and totally misleading to investors and the real return would result in an almost realised negative yield with regards inflation!

Its seems quite clear that a fraud may be taking place here, as the new asset management trustee shall be a UK company!

In there reasoning they state that Brexit is a factor for the sale and its quite clear that the UK's interests have come in and secured there timber so now that they own everything they won't have to deal with import tariffs as there just importing there own assets!

This is sickening, to think that this was part of my pension portfolio and some foreign national company is coming in from right under us after we have been patiently waiting 21 ****ing years just to snatch it away at a disgusting price, massive discount and to profit hugely from the timber and the land sale afterwards.

I bet the independent were contacted by VEON with that story in an attempt to lull investors to be happy and rejoice that this is going through. Sorry but this will not stand!

The directors of the fund are also part of the management staff of VEON and they have struck a deal with AXA that they will keep managing the assets, there by securing there own income that will now not be officially disclosed to us. Does anyone see a conflict of interest arising here on there part? They were obliged to work in the best interests of the preference shareholders to maximise our returns not to mention the consumer protection laws.

VEON (which was only incorporated 4 years ago!) should have nothing to do with the assets from this point on after that deal was inked as to ensure there is no conflict that would arise from the desolvment of the fund. But now it seems that the directors have sold our future returns at a massive discount to this crowd in AXA. I wonder if AXA will be buying VEON the company in the coming years, and all the directors will be getting fat pay outs for there company...

Utterly sickening.

Count Hairyfoot

ForFsSake wrote: »

I wonder if Ferghal O'Connor, who now works for Sunday Business Post, would be interested in following up his original story?

It's unlikely a quality journalist like himself would have written it if he wasn't given a hint from someone that all was looking good. Veon were also happy to link the article on their website (its still there!) adding credence to the positive letter they sent us in May. Quotes from the article include

"Thousands of small-time forestry investors across the country are set to receive a summer bonanza after the largest private forestry sale in Irish history ..........." and "The sale will see investors receive substantial returns on those original investments, it is understood."

I don't think he would use the phrase "it is understood" twice in a short article without having a source.

Full article link below

https://www.independent.ie/business/irish/forestry-investors-in-line-for-sale-windfall-38124848.html

Is this him?

https://mobile.twitter.com/fearghaloc?lang=en

Maybe someone with a Twitter account could forward him the link to this thread and see what he says.

IrForestryQ

Count Hairyfoot wrote: »

Is this him?

https://mobile.twitter.com/fearghaloc?lang=en

Maybe someone with a Twitter account could forward him the link to this thread and see what he says.

The Headline should read:

"The Great Irish Forestry Heist"

Shaun73

Independent Person

The letters dated 15 May signed by Paul Brosnan, Managing Director, state that following the completion of the statutory audit “The Statement of Assets and Liabilities will be reviewed by the Independent Person so that he is in a position to issue the relevant Independent Person’s Report.”

I have (courtesy of Deloitte and Touche website) put together the following material on the status of the Independent Person:

“One of the most significant features introduced by the Companies Act 2014 (“the Act”) is the Summary Approval Procedure (“SAP”)... “

“The new streamlined procedure authorises certain types of transactions to be carried out that would otherwise be prohibited. It combines several validation procedures from previous Acts, into a single process enabling seven specific activities which, until the introduction of the Act in June 2015, were restricted, prohibited or required Court approval.”

One of these transactions is a members’ voluntary winding up.

“The commencement of a members’ voluntary winding up is a restricted activity (as defined in section 200 of the Act). However, section 579 of the Act makes provision for a members’ liquidation via the SAP. The process involves a declaration of solvency, which must be made using a Form E1. In addition, a statement must also be made by an independent person that the declaration of solvency is not unreasonable.”

“The independent person must be a “person who is qualified at the time of the report to be appointed, or continue to be, statutory auditor of the company”.”

Comment: It is a pity that an application for Court Approval is no longer necessary in situations such as this, as it would probably have resulted in more transparency for the Preference Shareholders.

ForFsSake

Possibly a very stupid question here - but is there any possibility we have got the numbers wrong? The part I cant fathom is

1. We got a letter which stated "the returns generated from this transaction compares very favourably with returns generated from previously matured forestry fund transactions and reflects the robust sales price achieved for the company's forestry assets."

2. The website home page says the sale "is a very positive development for our shareholders, with the portfolio’s value and returns serving as a strong endorsement of the Irish forestry and timber sector."

3. The website hosts the Irish Independent article which states "The sale will see investors receive substantial returns on those original investments, it is understood."

So I am left to conclude that either we have the numbers wrong - which seems unlikely as we know the final bank balance and the number of shares issued and divide one into the other you get the expected return ....... or all the above was designed to keep everyone sweet until it was too late to ask questions.

The fact the accounts are dated 28th June but were held back until late Friday afternoon after the cheques were posted (assuming they were posted!) makes me think the numbers are good and the whole approach from the fund managers stinks to high heaven ...... but are we 100% certain we have the numbers right?

Any better educated people than myself out there that can verify?

Shaun73

Sadly, I think that the audited accounts say it all.

The Office of the Director of Corporate Enforcement defines corporate governance:

"Corporate Governance is defined as the system, principles and process by which organisations are directed and controlled. The principles underlying corporate governance are based on conducting the business with integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions and complying with all the laws of the land. It is broadly concerned with the relationships between company boards and the company's shareholders, accountability and responsibility towards the stakeholders. Good governance should facilitate efficient, effective and entrepreneurial management that can deliver shareholders value over the longer term."


No comment

Sonny noggs

A firesale now 10 years * earlier than planned based on short term market conditions is questionable.

Someone mentioned that the ‘glut’ of pest infected timber would only be suitable for burning so was hardly going to affect the price of uninfected timber 10 years from now.

Regarding Brexit, they must have a crystal ball to see how things will pan out 10 years in the future regarding trade agreements and a market for the timber.

More likely scenario is that the boys behind the schemes are approaching retirement age or simply wanted to sell up and these are the best excuses they could come up.

The projected returns were never realistic, the boom / bust cycle means we’re we going to have 2 or 3 recessions in the 30 year period but I don’t believe selling now was in the long term best interests of the preference shareholders.

Might well be in the best interests of the other shareholders though. As in the shares with voting rights.

dan1981

Sonny noggs wrote: »

... Might well be in the best interests of the other shareholders though. As in the shares with voting rights.

Given Veon will continue to manage the trees, but now for a different shareholder, one does have to ask who the sale now serves the interests of.

Sonny noggs

dan1981 wrote: »

Given Veon will continue to manage the trees, but now for a different shareholder, one does have to ask who the sale now serves the interests of.

In that case it is even more suspicion. Irish Forestry Funds website Contact Us shares the same address in Leopardstown as Veon. So in effect they have transferred the preferred shareholders assets to a third party with dubious justifications. The question of a conflict of interest certainly arises in those circumstances.

Shaun73

On 1 May, 2016, an article with the title “5 alternative ways to invest your savings” appeared in the Sunday Independent. One of the alternatives was “Buy trees”. An excerpt:

“According to Paul Brosnan of Irish Forestry Funds, the tax incentives are still generous, "Even when they cut child benefit, tax breaks on forestry were retained."

However, these days, investors are generally landowners, farmers or high net-worth individuals as many of the funds for smaller or amateur investors have closed, given the tighter regulatory environment.

Brosnan's company runs 19 forestry funds for 12,500 individual investors, but says "the time for the small investor is past". Instead they concentrate on those with over €100,000, given the onerous paperwork required.

"When you buy forestry, you have a contingent liability to keep it as such in perpetuity. This is not a transient investment for five years." The Government offers grants to plant the trees once a licence is secured from the Department of Agriculture, and the land purchased by the investor.

"We plant mainly commercial species and there is a chronic shortage of it," says Brosnan. The investment is free from income tax and, to a large extent, capital gains tax. "It would be ideal for someone in their 30s with a good bit of money who is looking for an alternative investment for retirement."”

According to the IFS website the average investment level is €3,500, which is considerably short of €100, 000. Paul Brosnan views our time as past.

Thargor

About how much did you get out of curiosity? Return on investment I mean? Did you get your money back at least?

Harry Palmr

Thargor wrote: »

About how much did you get out of curiosity? Return on investment I mean? Did you get your money back at least?

Nobody knows yet, the cheques should hit the mats tomorrow.

paris24

Well?? Did anyone get the post yet? I'm in work so wont be home til after it arrives.

tomgilboy

Postman arrived this morning with the 'lecky' Bill...nothing else ..not really surprised ..have a feeling I won't be the only one ...were they even posted on Friday ??? ..what's the next reason for delay ?

sue97

I got nothing in the post either.

dan1981

Wasn’t in this morning’s post here...

antietam1

My post could be later on, as late as 11.30

paris24

Talk about burying head in the sand, they have an automated voice message when you ring, advising to direct any queries by email. So that speaks volumes to me... deliver the bad news then take the phone off the hook.