He who pays the piper does not call the tune in liquidations.

That was the conclusion of First Deemster David Doyle as he gave a judgment in the case of the taxpayer-funded winding up of the Eco-Resources Fund.

In a judgment that will be seen as a defeat for the Financial Services Authority, he ruled that the conduct of a liquidation is a matter for the liquidator and not the regulator.

Gordon Wilson, of CW Consulting Ltd, has been brought in by the FSA as adviser, then controller of Eco-Resources which was set up to invest in bamboo plantations.

And then in March he was appointed provisional liquidator and official receiver when the fund was ordered by the high court to be wound up, unable to pay its debts of more than $2m.

At the time, the Deemster said no rescue package had been finalised and he could not allow the ’extremely unsatisfactory position to drag on any longer’.

But a claimed creditor of the fund and former director of EcoPlanet Bamboo IOM Limited, John Bourbon, applied for the appointment of a different liquidator, Mike Simpson of PwC.

And now the Deemster has approved the application, in the ’interests of justice’ saying he has concerns over Mr Wilson’s ’inappropriate Eco-baggage’.

He said: ’He who pays the piper does not call the tune in liquidations, including public interest liquidations.

’I do not doubt the integrity and competence of Mr Wilson as liquidator. On balance, however, I have concluded it is better both for Eco and in the public interest that Mr Wilson should not be appointed in view of his Eco "baggage".’

Mr Bourbon, a former director of Eco’s manager the Premier Group, now itself in voluntary liquidation, had argued that Mr Wilson’s involvement in Eco had led to a deterioration of its position and the prospect of any meaningful recovery for investors would be lost if he continued in position.

But both Mr Wilson and the FSA had serious concerns about Mr Bourbon’s plans for a refinancing rescue package. Mr Wilson initially declined to step aside and categorically denied serious allegations made against him by the Premier Group.

The FSA said both candidates were well-respected professionals.

Deemster Doyle said the FSA and Mr Wilson had shown little appetite for refinancing/restructuring, with the regulator wanting a speedy liquidation to keep costs to the taxpayer down.

It may well be that any rescue package would come to nothing, he accepted, but that was a matter for the liquidator. He added: ’There is no suggestion that Mr Simpson will simply be Mr Bourbon’s puppet.’

*It has been suggested to us that the manner of our reporting in the above article may have given the false and incorrect impression that EcoPlanet Bamboo Group LLC (a Chicago based entity, trading as EcoPlanet Bamboo) is related to EcoPlanet Bamboo IOM Limited. For the avoidance of doubt, EcoPlanet Bamboo IOM Limited (the Isle of Man based entity) is not associated with EcoPlanet Bamboo Group LLC (the Chicago based entity), nor its subsidiaries. Further, neither Eco Resources Fund nor EcoPlanet Bamboo IOM Limited have any interest in EcoPlanet Bamboo Group LLC nor in any of its plantations. We apologise for any misunderstanding caused by the manner of our reporting.