The island’s financial regulator has confirmed it is actively reviewing ’allegations and events’ surrounding an investment fund manager and its group of companies now in liquidation.

But a former non-executive director of Premier Group said the while some investors may have lost money, many more made a profit - and some could yet still do so.

Premier Group (Isle of Man) went into voluntary liquidation in November. The Manx taxpayer is picking up the bill to wind up two of its allied funds, New Earth Recycling and Renewables and the Eco-Resources Fund.

Meanwhile, an action group representing pensioners who lost their life savings in Premier Group is preparing to distribute a dossier of evidence to Tynwald members.

The Premier Shareholders’ Group said the Manx authorities had received a stream of complaints over the last 15 years - but claims the regulator, the Treasury, the Office of Fair Trading all failed to act.

Its Premier Papers allege:

* Hundreds of pensioners lost all or a large part of their life savings, with losses possibly amounting to many millions of pounds.

* Unqualified and unlicensed agents were paid large commissions to persuade pensioners to invest in schemes that were not as low risk as claimed.

* Investors were locked in with ’punitive’ exit fees.

* Directors received large management, promoters’ and performance fees.

* Despite the concerns raised with the authorities, the regulator in 2007 granted a licence to Premier Group (Isle of Man) Ltd in a new guise to be both fund promoter and manager.

A spokesman for the Financial Services Authority said: ’The FSA can confirm the allegations and events surrounding PGIOM and its group of companies are actively under review by the FSA.’

A spokesman for the Premier Shareholders’ Group claimed: ’There are hundred of victims spread across the world, at least 200 of them pensioners. Some of the reports we have had to listen to are truly heart breaking.

’Most people have given up any hope of ever getting their money back - but few of them have given up hope of bringing Premier to justice.’

But former Premier Group director John Bourbon, who helped design experienced investor funds while former head of supervision at the Financial Supervision Commission, rejected many of the group’s claims - and suggested Premier Group may be victim of ’something of a witch hunt’.

He said it was ’possible’ that hundreds of investors had made a loss - but an equal number or more could have made a profit.

’If you sold at the wrong time you could have made a loss,’ he said.

Mr Boubon insisted all the fees and charges were clearly set out in the offer document and would-be investors had to sign a declaration confirming that they understood the scheme particulars and that they qualified as an experienced investor.

He said: ’It is highly unlikely that anybody could have a significant investment in Premier Group without understanding the risk.’

Mr Bourbon said the Premier Low Risk Fund was a fund which invested in traded endowment policies which when they were first introduced were viewed as low risk investments although they ultimately waned in popularity.

’Those investors that remain in the PLRF would expect to see a positive overall return when the fund is wound up later this year,’ he said.

He said later funds had initially performed ’very well’. But they were then impacted by global financial turmoil following the 2008 credit crunch.

And when the Financial Conduct Authority in the UK moved against unregulated collective investment schemes, independent financial advisors stopped selling investments in them.

New Earth Recycling and Renewables (NERR), part of the New Earth Group of Funds, which invested in recycling plants in the UK, went into liquidation in June last year.

Eco-Resources Fund, which was set up to investment in bamboo plantations, was ordered to be wound by the high court in March this year.

Mr Bourbon said the liquidator and the FSA believed Eco should be wound up quickly but Premier believes otherwise.

He said: ’With the right liquidator it would be possible to refinance the fund, to pay off creditors and financial indebtedness by 2023 and be left with an asset which produces US $25m per annum for investors for the following 60 years.’

He added: ’Bamboo is an amazing fibre product the more you cut it, the more it grows. It can be used for anything from socks and pan scrapes to scaffolding on tower blocks in Hong Kong and at the other extreme activated carbon cleaning the world’s industrial chimneys.’

A Treasury spokesman added: ’We cannot comment on specific cases, but in general terms if Treasury received complaints of irregularities it would be normal practice to pass them on to the relevant authority or authorities.

’The Treasury maintain a regular line of communication with the Financial Services Authority but individual cases are a matter for the FSA in accordance with their statutory responsibilities.’

But Mr Bourbon believes there has been ’something of a witch hunt’.

He said: ’I think that there is a popular view in the market that certain negative elements of the Moneyval report have placed pressure on the financial services regulator because they do not have examples that they can give of successful prosecutions when compared with jurisdictions that have strong Mafia and/or other criminal activity.

’It might therefore be suggested that they may seek to find other examples of wrongdoing to justify their existance when in fact the reputation of the jurisdiction should support the efforts they have made. This has undoubtedly lead to a much reduced risk appetite.’

The Premier Low Risk Fund was an experienced investment fund launched in 2001.

These types of fund are unregulated and designed for experienced high net worth and institutional investors and not for sale to the general public.

But the PLRF, promoted by a BVI-based entity Premier Distribution Inc, was marketed as ’a blend of low-risk assets’ and an ’ideal investment for the cautious investor’.

The Spanish-based founder of the Premier Shareholders Group, who wishes to remain anonymous, invested Euros 75,000 Euros in the fund in September 2002.

His investment was arranged by a Costa Blanca-based financial adviser that advertised returns ’almost those from bank deposits’ and with investors’ capital ’100 per cent secured’.

Its advertisement anticipated returns to average 7 per cent over five years although it noted ’the first year has proved more difficult than expected’ and added: ’This is a low-risk fund not a no-risk fund.’

In December 2003 the share price started to fall and the investor attempted to withdraw his money only to be told he would have to pay a 4 per cent exit charge - which he had agreed to in the contract - plus another 28 per cent redemption penalty which he said was not disclosed in any of the documentation.

With no choice but to stick with the fund, he stayed with Premier for six years, receiving none of the promised income. When he was finally able to redeem the entire shareholding in February 2008, the shares were worth Euros 64,000, a loss of Euros 11,000.

He complained to the Manx authorities, alleging mis-selling and/or misrepresentation.

But the OFT dismissed his complaint as the independent financial advisor was not based in the Isle of Man.

And the FSC also rejected his complaint, on the grounds that he had signed the declaration to confirm he was an experienced investor.

Former Premier director Mr Bourbon pointed out that the IFAs had a responsibility to check whether investments were suitable for their clients.

He said in 2003, while working as a consultant and before being made a non-executive director of Premier Group, he was asked by the company to review investments made in the Premier Low Risk Fund and found a ’small proportion’ of cases had been mis-sold.

’I made recommendations to the directors of Premier Group and those investments were corrected,’ he said.

He said a number of investments were sold by unregulated IFAs in Spain and a number of claims against IFAs there have been upheld.

After the Isle of Man Examiner broke the news about the Premier Group and the allegations swirling around it, Treasury Minister Alfred Cannan announced a review of experienced investor funds in the Keys last month.