In this press release by the Bruno Manser Fund, BMF states that the International Tropical Timber Organization (ITTO) breached ITTO protocol by investing and losing US$ 18 million in public funds offshore in Australia and the Cayman Islands. After submitting questions related to the scandal to the ITTO, BMF was asked to leave the annual ITTO conference in Kuala Lumpur. BMF has called for financial transparency and the appointment of an independent special investigator to examine ITTO’s finances.
November 16, 2015
International Tropical Timber Organization loses US$ 6 million in speculative Australian real estate investments – Another US$ 12 million owed by dodgy Cayman Islands Fund – BMF calls for the appointment of an independent special investigator and serious institutional reforms
(KUALA LUMPUR, Malaysia) The International Tropical Timber Organization (ITTO), an international organisation tasked with leading tropical timber production towards sustainability has lost at least US$ 6 million in assets following speculative investments in Australian real estate and in Caribbean offshore trusts.
According to a report released today at the ITTO’s annual conference in Kuala Lumpur, the organisation discovered the loss of US$ 6 million invested in the Australian LM Managed Performance Fund in August 2015, two years after the fund went into receivership in March 2013. LM Managed Performance Fund was a speculative fund of Australian property tycoon Peter Drake whose collapse was one of the greatest bankruptcies of Australian history. The Fund invested over AUD $ 230 million in a failed real estate development named “Maddison Estate” on Queensland’s Gold Coast north of Brisbane.
Another US$ 12 million were invested by ITTO into Ardent 365, an investment fund managed by the Cayman Island-based Berkeley Hanover Inc, a subsidiary of Berkeley Hanover Ltd, Barbados. According to ITTO, the organisation’s auditors reviewed the audited financial statement of the Ardent 365 Fund in 2015 and “deemed this to be satisfactory evidence of the existment of this investment.” Both ITTO investments were in breach of a ‘zero risk’ investment instruction by the organisation’s Committee on Finance and Administration.
The Bruno Manser Fund (BMF) is shocked to learn about ITTO’s losses of public funds and the lack of a compliance culture within the organization.
“ITTO should never have invested in these speculative funds in the first place. Tax-payers’ money contributed by member countries for sustainable development must under no circumstances end up in offshore funds”, BMF executive director Lukas Straumann said. “Heads must now roll within ITTO and the organization must undergo serious reforms.”
Specifically, BMF calls for full financial transparency and for the appointment of an independent special investigator to examine the finances of ITTO.
The Bruno Manser Fund has submitted ITTO a number of questions related to the scandal and is currently waiting for answers.
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This press release was originally published on BMF’s website: www.bmf.ch