An Isle of Man fund set up to invest in bamboo plantations has been wound up - with investors told that any substantial recovery of their money is unlikely.

Billed as a ’truly green fund’. Eco Resources Fund had a total of 189 investors who invested their money in bamboo plantations in Nicaragua and South Africa via a special purpose vehicle, ERF Limited.

But at the high court last week, Deemster Doyle ordered that the fund be wound up, following an application by the Financial Services Authority.

The court heard that Eco had been having liquidity issues since 2014 and had been trying to raise long and short term financing but all avenues had now been exhausted.

As an Isle of Man Examiner page one investigation revealed in January, at the end of December it had cash resources of just £12,545 but had accrued debts of more than £2.3 million.

With the fund unable to pay its debts as they fell due, Deemster Doyle granted the FSA’s application and appointed Gordon Wilson of CW Consulting Ltd as deemed official receiver and provisional liquidator.

Mr Wilson will hold separate meetings of the creditors and shareholders of the funds within eight weeks.

The FSA has advised investors that at this stage it is not possible to estimate the amount of any recovery on the investments.

But the authority adds that given the financial distress of the underlying companies and the apparent foreclosure on the plantation assets, ’substantial recovery of value from the plantations may be unlikely’.

Eco-Resources was a collective investment scheme that was not regulated by the FSA, whose only remit for such investor funds is to register, receive notifications of changes and supervise appointed Isle of Man functionaries.

It was managed and promoted by Premier Group (Isle of Man) Ltd which itself has gone into liquidation.

Premier Group did not oppose the winding up but the application was opposed by shareholders Ray Withers and Patrick Barker.

Deemster Doyle said: 'The defendant has no officers. It has no directors. It has no secretary. It has no manager. It has no administrator. It has no custodian and it appears that a statutory demand in the region of some £2.4m has not been paid.'

He said there were also serious concerns at how security had apparently been granted to a third party (Sustainable Assets Lending LLC) over the underlying bamboo plantation assets and at how the Fund had arrived at the position it was now in.

'These important issues have been outstanding for some considerable time,' he said.

'The defendant cannot in such circumstances be permitted to continue in existence without the appointment of a liquidator to look after, and to look into, its affairs and to take any necessary action.'

The Eco Resources Fund’s three directors all resigned following a shareholder vote against liquidation which they felt was a vote of no confidence.

Proposed new directors had since refused to act, leaving the fund without a governing body.

The FSA first intervened in September 2015 when it issued directions concerning disclosure to potential investors and about bringing resolution to the solvency issues.

Mr Wilson was appointed as advisor in June last year and his role was subsequently extended to take over control of the affairs of the fund.