Investors who gave hundreds of thousands of euro to a Christmas tree planting company fear they have been the victims of fraud, the High Court has heard.
The claims were aired during an application to have an inspector appointed to WFS Forestry Ireland Ltd, a company which received investments and loans to develop trees in Ireland and the UK but failed to make promised returns to several investors.
Mr Justice Michael Quinn heard it is alleged, following inquiries on behalf of some investors, that locations where Christmas trees were supposed to be planted had no trees and WFS had no interest in the lands involved.
WFS director Craig Hands is contesting the application and maintains the “extraordinarily serious allegations” are based on “inaccurate evidence”.
While accepting investors did not receive payments when these were due, the English businessman maintained that at all times the conduct of the company was genuine.
In an affidavit, he claimed it had experienced financial difficulties due to failed negotiations for plots of land and the Covid-19 pandemic, but said he was confident the market would return in 2022, providing greater opportunities to make returns to investors.
The application is being made by John Kearney, an investor from Tralee, Co Kerry who advanced sums totalling €157,360 to the company.
Other investors who also claim to be owed large sums of money have sworn affidavits in support of his application.
Mr Kearney wants Declan de Lacy, of accountancy firm PKF O’Connor, Leddy & Holmes, appointed as an inspector to determine what became of investor funds, whether the company can discharge its liabilities, and to ascertain if offences have been committed under the Companies Act.
His application was opened by Frank Beatty SC.
If approved, it will be the first time an inspector has been appointed to a company on foot of an application from someone other than the Director of Corporate Enforcement.
WFS, together with a firm called WFS Property Service Ireland and a UK company called Walker Forestry Services Ltd operated a business that involved acquiring land, planting Christmas trees, and selling sub-divisions of the land as an investment asset.
According to court filings, investors were led to believe that they would receive substantial profits when the trees were felled and sold.
In addition to soliciting investments, loans were also solicited from private individuals to finance the purchase of forestry land and to set up a Christmas tree selling website.
Mr Kearney made a series of investments and gave loans.
However, he was not paid when investments matured in 2020 and 2021.
In an affidavit, he said that after the company failed to make repayments, he became suspicious and made inquiries via solicitor Peter Boyle and process server Glyn Roberts.
Mr Roberts went to lands in England last September year where trees Mr Kearney had invested were said to have been growing but reported that no evidence of a forestry plantation was seen.
Mr Beatty said Mr Kearney’s application was being supported by 17 other people who had invested over €1.4m in WFS. Almost all of them have yet to receive any return, the court heard.
One investor, Lorna Morrow of Ashbourne, Co Meath, said in an affidavit she was owed €396,620 following investments and loans made by her and her late husband. She said Mr Hands blamed Covid and Brexit for the failure to pay her when returns were due.
She said Mr Hands pledged to propose a repayment plan but none was forthcoming.
The court heard the Office of the Director of Corporate Enforcement declined to investigate and referred complainants to gardaí. However, gardaí declined to investigate on the basis that the issues complained of were civil matters and outside their remit.
Mr Hands denied fraud had taken place and said his primary objective was to ensure investors get what they are owed. “I have put eight years of my life and more into this and I am strangled. I can’t trade. I am being threatened on the internet,” he said.
The application was adjourned to a date later this month when Mr Hands will have a further opportunity to address the court.