Those you trust the most can steal the most.

- Lawrence Lief
 

by Chris Lee

Investors with memories might well recall all of those Fay Richwhite deals, and they might also recall a managed forestry fund named Flat Rock Forests, which blackened our skies a decade ago.  Flat Rock raised money promising to use it to buy maturing forests.  Later it raised more money, mortgaging its mature forests to plant seedlings, a totally different proposition.  Investors failed to stop management from taking this course of action that led to total failure, with investors getting back nothing from their $5,000 units.  I know a little about this because my wife had a small sum in this failed company.

Subsequently a very determined American woman, Ruth Hatch, has pursued all those involved, spending countless hours and money seeking to pinpoint the people and decisions that led to this appalling failure.  Finally she had a court appoint an inspector to examine and report on the disaster, but the report has not answered all her questions, so she now is refusing to pay the inspector's bill.  She wanted all investors to see her summary of the report, but has been halted from publishing her summary, because, she says, the inspector has advised he would have "no compunction in suing for defamation" if her summary was misleading or factually incorrect.

Flat Rock Forests remains a scar on our corporate face, which will not heal.  It seems wrong that Ruth Hatch must tackle this alone.  Perhaps she should just publish her summary, if she is certain she is right, and allow any resulting court cases to allow all the allegations, and all the facts, to be aired, discussed, and resolved in court.

Flat Rock Forests, one suspects, will not rest in peace until this determined woman has her answers.

Chris Lee's column [from which this was excerpted] alternates on the Monday business pages with Bruce Baskett's "Australia Watch"

Source: The Christchurch Press 21 January 2002

Common Misperception (at Least for NZ)

Source: The Wall Street Journal Tuesday 4 December 2001

For news articles on the Flat Rock Forests Trust, forestry, the Serious Fraud Office, one immigrant family's experiences, immigration specialists, fraud, juries, logging, and more, pressing the "Up" key below will take you to the Table of Contents for this News section.  Or you may wish to visit the Forestry Trust Table of Contents to read how a unit trust went bust.  Or the Topics Table of Contents which offers a different approach to lots of topics - among them poisonous insects, eating dogs, what's addictive, training vs teaching, tornados, unusual flying machines, humour, wearable computers, IQ tests, health, Y chromosomes, share options, New Jersey's positive side, oddities, ageing, burial alternatives, capital punishment, affairs, poverty, McCarthyism, the most beautiful city in the world, neverending work and more...