As with any emerging investment class, the alternative energy sphere has attracted its fair share of dubious investment opportunities including recent high-profile cases of VAT evasion involving carbon credits being sold into the European Union.
An Investors Chronicle reader recently alerted us to a further potential issue for investors in the sector. Mr Tim Drake was contacted by a company named WesternField Holdings who claim to be based in Tokyo. The cold caller, who gave his name as Noel Sadler, offered Mr Drake the opportunity to buy 1,000 carbon credits at £6.38 which would be sold on at a later date for £11. According to Mr Drake, the cold caller was incredibly persistent and rang back several times in an effort to persuade him to sign up. The figures used by Mr Sadler are similar to one bulletin board post we saw from 'Sceptic Investor' on 24 November which detailed an offer, also from WesternField to buy 1,000 carbon credits at E6.36 which could be sold at E11 in four months' time.
We investigated WesternField further, and discovered it has what appears to be a comprehensive website packed full of information about the company and its investments in carbon abatement projects. However, another reader contacted us after investigating the WesternField website himself to point out that vast swathes of text appear to have been lifted direct from various sources including the New South Wales government website in Australia and the Mississippi Forestry Commission. In addition, the biographies of several WesternField directors are very similar to biographies of directors found on a variety of other websites.
Notably, WesternField's website was only set up in May of this year and a host of press releases on the company only date from 2009. This is at odds with the company's claim to have been in existence for several years and to have won an environmental excellence award for "Best Carbon Reduction" project in 2004 from EDDI. We found no independent verification of this. There is EDIE (environmental data interactive exchange), which does give out awards for environmental excellence, but it has never awarded anything to a company called WesternField, and has only been running its awards for three years. Another company that claims to have won an award from 'EDDI' is Darwood Holdings; however, a click on its website reveals that the company has changed its name to Davenport Holdings, although much of the website remains the same, as is the management team.
We attempted to contact WesternField on two occasions but each time, having got through to the switchboard, were told none of the senior management or traders was available and that someone would call back. This never happened.
A trawl through several bulletin boards found many individuals who had been contacted by WesternField in an attempt to get them to invest in carbon credits, although none who has actually been tempted to do so. Each person contacted seems to have been called by a different named person and given a brief description of the investment opportunity before being sent some follow-up information by e-mail which is then followed up by a further call. The global scale of the issue is illustrated by the fact we found mention of WesternField on Danish, French and Australian bulletin boards.
WesternField appears to be offering investors the chance to invest in Voluntary Emissions Reductions certificates (VERs), which themselves are not the easiest credits to sell on due to a lack of dedicated registry. Analyst Andreas Arvatakis of Point Carbon points out that it is very unusual for individual investors to buy carbon credits and that the numbers of carbon credits normally traded are prohibitively high for individuals.
The Financial Services Authority and the City of London's Archway Operation, which is dedicated to investigating boiler rooms, have had very little contact with regard to illegal activities involving carbon credit trading but both advise investors who are cold called to exercise extreme caution.
