Tomato MIS degenerates into legal soup
The responsible entity of a tomato-based managed investment scheme (MIS) has launched legal action against its manager over its performance, which has allegedly put adviser commissions and investor returns in jeopardy.
Primary Yield Agricultural Investments, formerly Environinvest, has taken the action against Costa Group, Australia’s largest fresh produce wholesaler, over its management of the Primary Yield Tomato Project.
The seven year project, which closed for investments on June 15 last year, grows high-value truss tomatoes in a 50,000 square metre state of the art glasshouse located at Guyra in Northern NSW.
Primary Yield’s action is an “endeavour to pressure the manager to perform at its projected profit figures contained in the [Product Disclosure Statement] issued to investors”, according to the ‘Report to Growers 2007/08’ in the possession of Money Management.
The report adds that Primary Yield in the meantime is “doing everything possible to try to lift the profitability of the project to that which the manager purported”.
It is understood that Primary Yield is also currently engaged with Ernst & Young to identify potential purchasers of some of its plantation property portfolio (which is valued in excess of $30 million).
Primary Yield reportedly intends to sell its retail MIS business, which includes eucalypts and other products, but to remain as the responsible entity and promoter of the tomato project.
According to one Victoria-based project distributor, the sale of the MIS business “would provide sufficient capital ... to enable payment of outstanding debtors, including advisers and clients”.
Growth Partnership Group chief executive Warren Jones held a meeting with Primary Yield on June 16 to address a number of issues, including “Primary Yield’s future and commissions outstanding to advisers [and] clients”.
In a letter distributed to advisers he had “introduced to the project”, also in Money Management’s possession, Jones said he felt a “strong need and responsibility to work with you all on getting a positive outcome, including monies owed to all, and provide a level of comfort to you and your clients”.
AUTHOR
Mike Taylor
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