Creditors to vote on wind up of fund run by former minister Roger Prescott

Creditors and investors of failed forestry investment business Environinvest will meet in Melbourne this Friday to consider the receivers recommendation to wind up the company and most of its investment schemes.

Creditors and investors of failed forestry investment business Environinvest will meet in Melbourne this Friday to consider the receivers recommendation to wind up the company and most of its investment schemes.

Environinvest, which was founded by former Victorian state government minister Roger Prescott, is an unlisted public company that operated agricultural investment schemes, including tree plantations and cattle projects.

The company was placed in administration on 19 September, owing secured creditors Commonwealth Bank about $45.5 million and Adelaide Bank $33 million.

Environinvest receivers Craig Shepard and Mark Mentha of KordaMentha have commenced proceedings in the Supreme Court of Victoria to wind up the company and most of its investment schemes.

In a letter to investors obtained by SmartCompany, Shepard and Mentha explain that “Environinvest has no founds with which to fund the ongoing activities required to maintain the trees that are subject of the tree schemes”. The receivers say there are more that $2.1 million of costs that must be met urgently just to maintain the trees.

“The tree schemes are effectively insolvent and there is no cash available with which to otherwise continue ongoing… activity.”

An affidavit lodged by Shepard in the Supreme Court cites correspondence between Environinvest directors, including Prescott, and the company’s auditors. In one letter, auditor David Nairn of HLB Mann Judd noted “ambiguous transactions with little documentation” and questioned the timeliness of financial reporting.

Environinvest directors have been trying to sell parts of the business for several months without luck.

Several high profiled people, including former cricket star Dean Jones, are reported to be among the investors who poured $70 million into Environinvest’s schemes.