Álvaro Másquez, lawyer of the Legal Defence Institute defending the indigenous community, points out that they demand the annulment of the sale agreements entered into between alleged land traffickers and the Melka Group to acquire some of the lands later used for oil palm production.
“There is an element of corruption in the awarding [of lands by the regional government to individual sellers] under investigation by the Public Prosecutor’s Office and the General National Audit Office”, he stated. Indeed, the matter involves the regional government of Ucayali, which, according to the investigations by Convoca.pe, awarded “certificates of possession” for these lands without the beneficiaries demonstrating their presence in the place.
The large-scale clear-cutting in these lands began in June 2012, and they are now covered with Ocho Sur’s oil palm plantations ―current owner of the lands of both of Melka Group’s companies― as confirmed in an assessment by the Monitoring of the Andean Amazon Project, which monitors deforestation in the rainforest using satellite images.
That same year, Anholt started a relationship with the Melka Group as “an indirect minority equity investor” in United Oils Limited, a company funded by this businessman under investigation, according to the information published in 2014 by American company Anholt Services USA but no longer available on its website.
“The connection that you appear to be trying to make likely stems from some shares that Anholt owned in an agriculture investment fund, that Anholt did not control. That fund owned some shares in United Oils; and that fund did not control United Oils”, responded Michael Spoor, CEO of Ocho Sur since 2019, via email after being consulted for this article. We asked which was the name of such fund, but he did not reply.
If Anholt’s equity was minor, as claimed by Spoor, it stopped being minor in 2014, when a “further investment” was announced.
Ucayali deforested for large-scale oil palm plantations by the Melka Group. Photo: Diego Pérez/Oxfam.
“[Anholt] was approached by UOL [United Oils Limited] to design a creative and mutually beneficial structure to enable the company to continue with its development and expansion”, declared the investment fund in the same publication of 2014, which was deleted from Anholt Services USA Inc.’s website when questionings on Melka’s operations in the Peruvian Amazonia arose.
The new financial operation would allow a greater flow of capital from The Kattegat Trust, through Southern Harvest Partners LP ―an Anholt subsidiary―, to the Melka Group in the shape of note purchase from United Oils Limited, a type of loan in which note holders receive a fixed return within an agreed short term.
According to the documents accessed by Convoca, everything indicates that the “creative and mutually beneficial structure” announced by Anholt in September 2014 was a stock issuance and sale agreement entered into on 23 July of that year between Dennis Melka’s United Oils Limited and an offshore company incorporated in Bermuda a week before named SH UOL Administrative Agent Ltd; the latter would later represent the “note holders”.
Who was the owner of this new company created in Bermuda? We received no answer from Anholt or Ocho Sur, but according to the registries in Bermuda, SH UOL Administrative Agent has three directors, all of them connected to The Kattegat Trust: Peter Antturi, Core Lee Starzomski and Louie Escalona Cuarentas.
How much money was injected with the note purchase? The companies did not answer this question either; however, Melka Group’s international lawyers gave us a hint through some of their statements.
A statement made in November 2014 by the well-known American law firm Jones Day, which represented United Oils Limited, highlights that they gave advice for a 28-million-dollar note issuance “to various private and institutional investors”. They added that the financing was aimed at an oil palm project in 10,700 hectares owned by United Oils.
When this money was injected, the accusation of deforestation had already been filed. One year earlier, in May 2013, CONVEAGRO -a Peruvian farmers union- reported to the Public Prosecutor’s Office that 30 employees of Melka Group’s Plantaciones de Ucayali had trespassed private and state property in the small village of Bajo Rayal (Ucayali) and deforested lands using tools and machinery.
When asked about the financing by Anholt and Amerra to these operations in Peru, Ocho Sur’s lawyer Karim Kahatt argued that “such money did not belong” to these companies. Why not? “Once the credit disbursement is made [by the investors], it belongs to United [Oils Limited]”, he replied.
To which extent did Melka’s investors know about the origin of the lands? “As I understand, the lenders [Anholt and Amerra Capital] had hired highly respected and reputable Peruvian law firms to perform legal due diligence on the assets of the borrower prior to making any loan to it”, claimed Michael Spoor, CEO of Ocho Sur.
“The due diligence performed by the Peruvian lawyers showed nothing remarkable or unusual about the origin of the titles or the titling process”, he added.
Ocho Sur’s lawyer Karim Kahatt points out that the company he represents learned through the official documents [property deeds] that they were “seized properties mostly used for agriculture for the last 30 years”.
“Now, if there was a questionable land granting, [Melka’s] Plantaciones is responsible, not Ocho Sur”, declared Kahatt. That is, it is responsibility of the former companies financed by the current shareholders of Ocho Sur.
The documents to which Convoca had access state that the agreement between Anholt and the Melka Group was internally called “UOL Note Agreement” and it could be “amended, restated or supplemented” or “modified from time to time”. This means that values and conditions could vary.
Image no longer available on the website of Anholt Services USA Inc., to which the design and management of a mutually beneficial creative financing was proposed.
United Oils’ international lawyers from the Jones Day law firm also announced the issuance of warrants for note buyers, that is, rights to eventually buy stock from United Oils. We requested an interview with the American law firm to ask for details about such operation, but there was no answer.
Were the Kattegat Trust companies the only ones participating in this 28-million-dollar injection in which its related company SH UOL Administrative Agent represented those acquiring the bonds? Neither Anholt nor Ocho Sur answered.
We insisted on requesting interviews to the email address of Amerra Capital ―the other investor that is now shareholder of Ocho Sur― to know what was its participation in the financing of the Melka Group. The New York company did not answer either.
When the criminal complaints against the Melka Group filed in 2013 reached the Judiciary, the founding shareholders of Plantaciones de Ucayali ―two lawyers from the Benites, Forno & Ugaz law firm in Lima― denied their criminal responsibility by claiming that, before the events, they had transferred their shares to an offshore company named Jonaquille Limited established in the British Virgin Islands, where the trace is lost.
What was Jonaquille Limited, the nearest company to the extinct Plantaciones de Ucayali? It is presumably an under-the-counter vehicle to control Plantaciones de Ucayali, which was still related to United Oils Limited, as the latter continued controlling the plantation and negotiating financing.
The British Virgin Islands ―where the offshore company Jonaquille was established― goes on stage once again with a new money injection in favour of United Oils Limited, which was announced by the offshore law firm Conyers Dill & Pearman in March 2015.
Conyers law firm indicated that it had given advice on laws in Cayman Islands and the British Virgin Islands to “the purchaser, note holder and security agent” in a financing scheme for United Oils Limited, issuing notes for not less than 48 million dollars. Four months before said statement, Peru’s Ministry of Agriculture had ordered the Melka Group, for the first time, to stop the operations of the now liquidated Plantaciones de Ucayali, as it had no environmental certification.
We sent a number of questions to Conyers Dill & Pearman to know who would be behind that new operation that financed Melka’s questioned project for said amount.
“We are unable to provide further information concerning United Oils Limited, as Conyers does not discuss client matters since they are confidential”, replied the law firm involved in the “Mauritius Leaks” ―the tax evasion scandal in Africa revealed by the International Consortium of Investigative Journalists (ICJ); in it, its legal advice to multinationals was made public― to Convoca.pe.
What Conyers Dill & Pearman does mention on its website is that the Hernández & Cía law firm in Lima and Dickstein Shapiro LLC’s branch in Connecticut, located 15 minutes away from the headquarters of Anholt Services USA Inc., participated in the same financing to Melka Group.
Another publication on Hernández & Cía’s website confirms that a 48-million-dollar financing ―the same amount― to United Oils Limited corresponds to a note issuance agreement signed in July 2014.
As previously mentioned in this report, a 28-million-dollar initial agreement ―that could be “modified from time to time”― between Melka’s United Oils Limited and a company linked to The Kattegat Trust and Anholt’ subsidiary SH UOL Security Agent, which represented the note holders, was announced that same month and year.
The companies and lawyers involved in these operations did not want to specify whether they are two different capital injections or the increase of an original amount. We requested an interview with an Anholt’s representative, but its vice-president, Robert Decosimo, stated that it made more sense having Michael Spoor, Ocho Sur’s CEO, as only contact. We sent our questions about Anholt’s unusual participation to both Decosimo and Spoor’s emails, but they did not answer.
The Hernández & Cía law firm did not accept our interview request either. The Dickstein Shapiro law firm, for its part, was closed down.
In May 2015, the indigenous community of Santa Clara de Uchunya, in Nueva Requena, Ucayali, reported to the Public Prosecutor’s Office that the flora and fauna of the Amazonian rainforest were being destroyed with heavy machinery and ditches were dug out to bury trees and leave no evidence. The actions reported took place in the area where another Melka Group’s company, Plantaciones de Pucallpa, was settled and which is claimed by the indigenous community as ancestral domain.
“There are groundless accusations that the company has clear-cut trees in primary forests”, declared Ocho Sur’s lawyer Kahatt. “Pucallpa has motorways […]. Do you think a place that is one hour away from the city of Pucallpa had primary forests in 2013 or 2014? That’s impossible. What had grown there after farmer’s intervention were secondary forests”, he stated.
However, the Monitoring of the Andean Amazon Project maintains that most part of the deforestation performed in both plantations ―that back then belonged to Plantaciones de Ucayali and Plantaciones de Pucallpa― covered an area of 12,188 hectares, 9,040 of which (77 %) corresponded to primary forest.
Ocho Sur’s lawyer, Kahatt, is familiar with the lands’ history. When consulted by Convoca, he confirmed having met Dennis Melka in 2015 -before Ocho Sur was created- and having provided legal advice in regulatory and farming matters for his business group; for instance, on 2 September 2015, when Peru’s Ministry of Agriculture ordered Melka Group’s Plantaciones de Pucallpa to stop operations for the second time.
The Ministry confirmed that such lands had been almost totally clear-cut and farming activities were being conducted without environmental certificate once again. As a result, operations were to be stopped until the submission of an approved “land classification” by the Melka Group. Kahatt says there was a number of irregularities, one of them being that the Ministry of Agriculture had already allocated those lands to previous individual owners for farming use.
That same day the stoppage occurred, the more than 200 plots of Plantaciones de Pucallpa and Plantaciones de Ucayali became untouchable. We learned that both Melka Group’s subsidiaries signed a so-called Security Trust Agreement with SH UOL Administrative Agent ―with directors related to The Kattegat Trust― and La Fiduciaria.
Using this legal and financial mechanism, the plots went under La Fiduciaria’s management so that, should United Oils Limited fail to pay its investors by February 2016, the lands could be auctioned to collect the debt. While in the hands of La Fiduciaria, plots would not be seizable.
Kahatt claims that he gave no advice for this financial operation.
“Amerra and Anholt have been enormously affected by a manager [the Melka Group] that could not rise to the occasion”, declared Kahatt referring to his former client.
From Melka Group to Ocho Sur
Amid deforestation accusations, press revelations and Uchunya community’s requests for domain expansion in 2015, the plots were under scrutiny. In addition, the indigenous people filed a complaint against the Melka Group to the Roundtable on Sustainable Palm Oil (RSPO), an international organisation whose aim is to certify companies that produce sustainable palm oil.
It was then when the security trust was signed.
In April 2016, RSPO demanded Plantaciones de Pucallpa to stop its operations until the complaint was settled. However, a report by the Ministry of Agriculture proved that workers with tools for work and farm waste burning were in the plots of the company, which was supposed to be inoperative.
Ocho Sur says on its website that the shareholders of Plantaciones de Pucallpa and Plantaciones de Ucayali -led by Melka- stopped financing the business and the operations and failed to pay investors. Now we know Anholt and Amerra Capital were among them.
As a result, the Melka Group’s breach, as provided for by the agreement, led La Fiduciaria to schedule three rounds of public auctions to sell the plantations: on 30 June, 7 July and 14 July 2016.
The call for the auctions is still on the web. It was published in English in the Jakarta Post newspaper of Indonesia on 23 June, a week before the first auction date, demanding potential participants 17 thousand kilometres away to comply with requirements in record time.
“Interested bidders may expressly indicate interest in participating in the public auction and request the auction conditions by delivering a notary letter to Calle Los Libertadores 155, Piso No. 8, San Isidro [Lima] (…)”, the letter published in Indonesia read.
By that time, the new companies of the investors had already been incorporated and would be used to participate in the auction to obtain such lands.
“Ocho Sur P and Ocho Sur U were created back then by creditors who made the difficult decision to offer their debt amounts to buy the business and prevent the catastrophe that would have resulted from the abandonment of lands, jobs and economic activity in the plantations”, declared Spoor. “In other words, they had to play for the team”, said Kahatt.
Ocho Sur U and Ocho Sur P were already registered in the Peruvian Public Registry since May 2016, one month before the first auction. Its founding shareholders were lawyers from Hernández & Cía, the same law firm that gave advice about the trust agreement, the auctions and the transfer.
However, we could confirm that the current owner of both local companies is Peruvian Palm Holdings Limited, domiciled in Bermuda and created in May 2016. It is thus revealed by the public instruments concerning the last capital increase of Ocho Sur P and Ocho Sur U, which showed that Peruvian Palm Holdings owns, directly and indirectly, 100% of these companies.
SELLO Escrituras Públicas d... by ConvocaRedes
As confirmed by the public instruments, Peruvian Palm Holdings owns, directly and indirectly, 100% of these companies