Ostrich firm `siphoned off pounds 7m of funds'

A "get-rich quick" ostrich-farming firm siphoned off pounds 7m of investors' money through a "shadowy" finance company, the High Court heard yesterday. The Ostrich Farming Corporation was running an "illegal operation that was bound to fail", it was claimed. The Mansfield-based firm is facing a winding-up order at the High Court after an inquiry into its activities.

Philip Heslop QC said its advertising was misleading, its pyramid-style selling was bound to fail and many investors who own birds did not know that they were probably dead. "They claimed that their facilities throughout Europe and in the UK were the largest and most technically advanced. In fact this company never owned a single farm and the claims were thoroughly misleading."

But the advertising, and a projected minimum return of pounds 500 per bird, led to huge investment in the company, which touted ostrich meat as a lean and tasty alternative.

Mr Heslop said an Official Receiver investigation uncovered an investment of pounds 4m in March this year, pounds 300,000 less than in February. Investors paid pounds 738,000 between 28 March and 4 April of this year, shortly before the DTI inquiry.

"pounds 7,495,305 had been paid to Wall Street, an offshore company, the investigation found. The company is a very shadowy Delaware offshore company and there seems to be absolutely no reason at all for these monies to be paid," Mr Heslop said.

He said company was run by a Kevin Jones, who knew the Ostrich Farming Corporation's directors, Neil Cunliffe-Williams, Brian Ketchell, and Alan Walker. Mr Cunliffe-Williams was involved in another action involving a separate ostrich-farming company at the High Court yesterday.

Mr Heslop added: "While each investor is supposed to be able to identify his particular ostrich, it is impossible to do so. The Official Receiver, who travelled to Belgian farms, discovered that 446 ostriches were known to be dead."

At an earlier hearing, Mr Justice Lightman imposed a receiver on the Cheshire-based Pinstripe Farming Company Ltd, accusing the company's voluntary liquidator, Stephen Conne, of "quite disgraceful conduct". The firm was set up by Mr Cunliffe-Williams, who, the court heard, received "substantial remuneration" before it was declared solvent.

Lawyers in both cases argue that the ostrich companies are in breach of financial guidelines set up to protect the investor.

The Ostrich Farming Corporation case continues today.