Forestry firm described as Ponzi scheme has bank account frozen

The High Court has granted a freezing order over a bank account of a Dubai company linked to an Irish forestry investment firm which is subject of a Garda investigation.

The order was sought by Declan De Lacy, provisional liquidator of Irish-registered Arden Forestry Management, which is involved in investment in forests here. Most of its 132 investors are UK-based.

Mr De Lacy, represented by Brian Conroy BL, sought the order over monies held in the Noor Bank in Dubai in an account belonging to a UAE-registered firm, GTD International.

Counsel said it appeared Arden Forestry Management had the “hallmarks of a ponzi scheme”.

The company is the subject of a Garda investigation. It had raised €4 million from UK investors and was to use the funds to buy forestry in Ireland but only €200,000 was spent on forestry and the rest of the money appears to have gone elsewhere, counsel added.

Funds transferred

Some of the investors’ funds, an estimated €1.5 million, had been transferred to an account of GTD International which is linked to Arden, counsel said.

It was thought some of those funds had already been dissipated and, while €100,000 from the GTD account had been returned to the liquidator, there were concerns about the remainder, some €600,000, being dissipated, he said.

In those circumstances, Mr De Lacy wanted injunctions freezing the amount of money in the account.

Mr Justice Tony O’Connor said he was satisfied to make the order on an ex parte basis (one side only represented) and returned it to next week.

The High Court last month appointed Mr De Lacy of PKF O’Connor, Leddy & Holmes, as provisional liquidator of Arden on the application of the directors after hearing it was insolvent and unable to pay its debts.

The move came after the court heard, following a Garda investigation, there had been a blocking order on its main bank account with AIB in Ireland which meant it was effectively unable to operate.

In an affidavit, Garret Hevey, one of Arden Forestry's directors, said he and his fellow directors deny any wrongdoing.

Because the AIB account had been frozen, “the company has thus been put into an impossible position”, he said.

As land purchases were taking longer than expected, Arden Forestry took a decision to invest some funds, under advice from a Gibraltar-based company, in Spanish property, he said. Arden Forestry directors set up GTD International in Dubai to buy properties in Spain, he said.