MIS Schemes

StickyMIS

Postscript 29/4/24 The site is mothballed. Sub-domains are deleted, and forums and mailing lists are closed.

Grower investors across Australia have lost much if not all of their investments in the failed Managed Investment Schemes (MIS). They have primarily failed due to cash flow reasons and moved inevitably from administration to receivership and liquidation.

Those with viable harvests have been most attractive to the insolvency kleptocracy, as the disclaiming of grower assets can lead to firesales to third parties, extortionate insolvency fees and the socialisation of parent company losses across thousands of individual grower investors.

Growers money that underpinned the establishment of significant primary industry businesses have not been fairly rewarded for their initial investments. Insolvency can proceed without any determination of fault, and where court action is underway against directors and auditors, it is drawn out interminably to well after the loss has been borne by growers who were never at fault.

  • AGW Walnuts – MIS schemes were originally administered by Gunns Plantations as Responsible Entity (RE), and then by AGW Funds Management, a subsidiary of Webster Ltd. Growers were held to an onerous contract, while Webster bought the full annual harvest at a price seemingly discounted to that available in the open market. Independent pricing reviews were never made available for verification by growers. In May 2019 growers, under financial and governance duress voted to terminate the schemes, and 15 years of harvest rights were transferred to Webster.
    Postscript 29/4/24 Sqeezed and flushed by Websters, the walnut business thrives. Foundational MIS investors are not mentioned anywhere on the Stahmann Webster wwebsite despite their Vision and Values – “Honour our legacy.”
  • Gunns Plantations Forestry – growers assets were pooled with Gunns Ltd assets and sold with them. The final distribution was well below market valuation and growers subsidised the liability of the parent. The companies were not cross-collateralised. Unsold asset category(s) received large portions of the sale, state actors leasing crown land prevented sales and contested grower returns, and the court proceeding is yet to move from directions hearings to action against those accountable for the collapse of the parent.
    Postscript 29/4/24 Sustainable Timber Tasmania (formerly Forestry Tasmania) obfuscated for 1100 days on a Right To Information request. Its Board including the Chairman, Government Minister stakeholders, CEO and Non-Executive Directors offered no justification for procuring harvest-ready GPL Woodlots for a measly $100 per ha, which is was in stark contrast to the $4k it would cost to establish them. Lower-quality lots were chipped to make SST profitable while higher quality become the foundation of STT’s production forest.
  • Quintis/TFS Sandalwood – Early schemes moved into Administration and Receivership in 2018 and a Grower Co-operative is fighting to establish a new RE. The Board and Executive, which are comprised of some of the same individuals failed to report to the market that their key customers had not renewed their purchase agreements.
    Postscript 29/4/24 Blackrock flushed shareholders and took Quintis private. Modelling in 2023 KPMG found the schemes unviable, and the supposedly independent scheme RE terminated all MIS schemes. The KPMG study assumed the annual harvest offtake would never exceed 200 tonnes, despite citing McKinsey research that the global demand was ~10,000 tonnes. Blackrock is poised to become the monopoly grower of sandalwood globally.
    MIS investors with lots on third-party land are exploring the option of funding their own maintenance and harvest directly.

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The Courts are ineffectual in achieving fair and equitable outcomes. Receivers and Liquidators operate under a licence from the Court, and hold the whip hand. The Court defers to them on business agreements reached, and provides orders to formally conclude proceedings. These orders are often made after the insolvency actions have all but completed.

The adversarial nature of proceedings (as opposed to a fairer investigative approach), demands that growers face inordinately high court costs to challenge Receiver and/or Liquidator actions.

A Walnut Growers Forum set up

AGW Walnuts

Postscript 29/4/24 The Forum is closed.

The Walnut Growers Forum has been established to facilitate  discussion for all AGW MIS stakeholders. Use the link to navigate there.

Webster (broken) and its walnut subsidiary, Walnuts Australia make no direct reference to their foundation orchards funded by MIS scheme grower investors. These secure supply for Webster’s large wholesale customers. Active grower investors have not found their Responsible Entity, AGW responsive or transparent in its dealings with them. 

Last year I requested that AGW Funds Management Ltd (broken) facilitate discussion among all stakeholders. They have not done this. They prefer to challenge representative parties legitimacy than answer broad management and performance questions. It is a divide and conquer approach, and reflects on the integrity of both Webster and AGW, executive and board.

Online, AGW Ltd does include a library of formal documents (broken) including Annual Reports, Newsletters, Product Disclosure Statements and the 2017 Grower Meeting Minutes.