Capital Alternatives and Capital Carbon Credits taken to the High Court by the Financial Conduct Authority

The UK Financial Conduct Authority has taken Capital Alternatives and several other firms to the High Court, accusing them of “promoting and/or operating collective investment schemes (CISs) in the UK illegally and without our authorisation”.

On its website, Capital Alternatives claims to be “The UK’s leading alternative investment promoters,” offering various products for sale, including palm oil, Australian wheat, Australian reforestation, gold, silver and platinum, memorabilia, and wine. The court action taken by the Financial Conduct Authority focusses on two investment schemes:

• African Land (also known as Agri Capital) which offers investments in rice farm harvests in Sierra Leone, and is operated by African Land Limited.

• Reforestation Projects (also known as Capital Carbon Credits) which offers investments in carbon credits generated from land in Sierra Leone, Brazil and Australia. It is operated by Reforestation Projects Limited.

The trial is to take place in Autumn 2013. In the meantime, the assets of the companies have been frozen. If the court decides that the investment schemes were run illegally, it can order the companies to pay compensation to investors. The Financial Conduct Authority however points out that,

you should be aware that, even if the court grants an order for investors to be compensated, we have found in similar cases that the defendants usually do not have enough assets or funds to pay the full amount ordered.

PHOTO Credit: Mark Ayres giving a talk to staff at Capital Carbon Credits.

Capital Carbon Credits was founded in December 2010. The following month, a new director joined the company, calling himself Mark Eyres. In March 2013, investigative journalist Andrew Penman at The Mirror looked into Capital Carbon Credits under the headline “Danger: green investment from Capital Carbon Credits”. Penman discovered that while Eyres has an interesting background, it has little to do with carbon trading, forest conservation or climate change.

Eyres isn’t his real name. Mark Andrew Heaver joined the police after leaving school, but only lasted 18 months. In the early 1990s he worked as a security boss. In 1995, he was sentenced to 13 years for paying hit men to kill Michael Donovan, a boxing manager in Liverpool. The judge described the crime as of the “utmost gravity”.

After seven years, Heaver was released from prison. He changed his name to Mark Ayres and in 2005 set up a company called ITA Overseas Escorts. The company’s main work involved managing an £8 million contract from the Home Office to “remove and deport failed asylum seekers and illegal immigrants from the UK”. Ayres’ CV included fabricated stories about reaching the rank of major after serving with the Royal Marines and the Special Boat Service. When ITA Overseas Escorts went into liquidation, the company had paid only £370 of a tax bill of £427,000, according to the Insolvency Service. In November 2010, he was banned from being a company director for six years.

Ayres changed his name to Eyres and became a director of Capital Carbon Credits in January 2011. He told Penman he had no idea that he’d been banned from being a company director and it was an admin error that his name appeared as “Eyres”. Capital Carbon Credits changed its name to Reforestation Projects Limited in February 2013.

Eyres was also director of another company called Climate Care Investments Limited. Eyres told Penman that his role was to ensure that Capital Carbon Credits’ project got carbon offset accreditation.

Capital Carbon Credits claimed to have 50,000 hectares of forest bordering the Gola Forest in Sierra Leone:

The Gola Forest is the largest area of closed canopy lowland rain forest remaining in Sierra Leone. As a result, it is a key region in which carbon credit generation is likely.

A company called Climate Care Global was Capital Carbon Credits’ “accreditation partner”. Mark Gibbs, the director of Climate Care Global was also a director of Reforestation Projects Limited (as Capital Carbon Credits is now called). Climate Care Global’s website no longer exists, but Capital Carbon Credits made up a story about the company being a “leading project developer”:

Climate Care Global is one of the leading project developers in sourcing and developing Certified Emission Reduction (CER) projects credits through the Clean Development Mechanism (CDM) applied to emission reduction projects in developing countries which deliver real and measurable emission reductions.

The company’s website explains that the company was offering a series of one hectare plots of land for sale with sub-leases for 45 years. “Once 80% of the total leased area has been sub-leased, the individual plots will be legally registered; this has no impact on the granting of the Carbon Credits.” Hardly reassuring, is it?