WHY on earth do I want to own an Ostrich? This question, posed by a promotional pamphlet plus an extensive advertising campaign, attracted at lease 60 Irish investors who are now asking themselves the same question for a second time after the collapse of the British-based Ostrich Farming Corporation. A provisional liquidator was appointed to the company on the application of the British Department of Trade and Industry (DTI). The question for investors now is: Will they ever see any of their money again?

The advertising campaign in Irish newspapers commenced last Christmas and offered what appeared to be spectacular returns on the purchase of ostrich breeder chicks and adult birds.

The Ostrich Farming Corporation was based in England with a farm in Belgium, and claimed to have sales offices in Cyprus, France, Holland, Ireland, Jersey, Portugal, Spain, the Middle East, the Far East and Scotland. It offered ostrich chicks for £1,400 each and breeder birds for between £6,000 and £14,000 and guaranteed returns of 51.6 per cent per annum for five years on expenditure through a buy-back scheme.

In its glossy newsletter and brochures the company made a number of claims about the value and appeal of ostrich meat, hide, feathers and oil and the ability of mature ostriches to produce up to 90 eggs per season. Ironically, one of its own newsletter stories asked if the offer was too good to be true.

The fantastic claims about ostrich production and potential investment returns caught the eye of the DTI quite soon after its launch in 1995. As the ultimate regulator of investment companies and schemes, the DTI sought the appointment of a pro visional liquidator on April 3rd last. In seeking the appointment of a provisional liquidator the DTI alleges that:

The company's marketing campaign summarily misrepresented the breeding life and capacity of ostriches;

The company's estimates of the futures market in ostriches was not based on reliable information or prudent projections;

Records of ostriches and chicks were not properly maintained;

Guarantees to buy back numbers of chicks were dependent on new members joining the scheme leading to the inevitable collapse of the buy-back structure;

The company paid substantial sums to connected companies without justification;

One of the company directors is currently the subject of disqualification procedures for activities related to a different company.

Family Money understands that the provisional liquidator has written to at least 60 Irish investors informing them of his appointment and asking for copies of any documental ion relating to their investment. According to the DTI his investigation has been hampered by the poor record keeping at the company and "there is some uncertainty about who owns what birds". Each investor was issued with a corresponding number which was supposed to be electronically tagged onto their bird and Irish investors are advised to make sure that the liquidator is informed of their tag number, said the DIT spokesperson.

It would appear that people here mainly purchased breeding chicks at £1,400 or £1,500 each. One investor we spoke to said that although "I knew this was risky, I didn't think I would lose my money in a matter of a few weeks". Another admitted that he was "a bit concerned that the ostrich farm was in Belgium and not in the UK" and that he had further suspicions about the company when a notice arrived with the application form stating that the price of the breeding chicks he was interested in would go up from £1,400 to £1,500 in February while the annual buy-back price was being reduced by £100. "I thought it was just a marketing ploy to get people to make up their minds quickly," he said.

The Ostrich Farming Corporation owners may be kicking themselves now that they did not see the warning signs, but they are not alone. At least two other ostrich farm/investment ventures have gone into provisional liquidation in the last couple of months, involving several thousand investors, says the DTI.

Another court date has been set for late June to establish whether the company should be formally wound-up and it is then that Irish ostrich chick owners will know whether they have lost all or just part of their investment.