Online German DW public radio brings us a report on the latest developments concerning the Prokon Holding GmbH & Co. Verwaltungs-KG wind-park investment debacle.
Image: Prokon
The Itzehoe, Germany based Prokon was founded in 1995 and specialized in the planning, financing and construction of onshore wind-parks in Germany, Poland and Finland. Prokon’s business model had come under scrutiny several times in the past, with some even warning that it resembled a Ponzi scheme. Instead of securing financing from banks and lending institutions, the company attracted capital from private persons, enticing them with promises of high rates of return and a contribution to protecting the climate. Early on many politicians praised the model.
Since it was founded in 1995, the company raised 1.4 billion euros ($1.9 billion) by “advertising directly to the public, touting profit participation rights and promises of superb annual returns” to potential private investors. In total 75,000 investors took up the offer. But as time went on critics began to accuse the company of using fresh money coming from new investors to pay the returns for the older investors. They warned that it was only a question of time before the scheme would collapse.
The critics were right: On January 22, 2014, the company declared insolvency. Prokon’s pony-tailed managing director Carsten Rodbertus, however, insisted that the company was still “essentially healthy”, and then blamed the investors for the debacle because they demanded the high returns that had been promised, or a refund of their principle, Spiegel wrote.
Spiegel also wrote that the woes were not only unique to Prokon, but to many windpark developers all over Germany. “In courts around the country, complaints are mounting from wind park investors who haven’t received a dividend disbursement in years or whose parks went belly up. Consumer protection activists are complaining that many projects are poorly structured and lack transparency.”
Meanwhile yesterday a number of investors gathered to vote on how the insolvent Prokon company would proceed in order to settle the 391 million euros ($542 million) in outstanding investor claims. They voted to sell off some of Prokon’s assets in a desperate attempt to “recoup at least some of their original investment.”
The Prokon debacle has even led the German government to introduce new rules to regulate how financial products may be advertised to retail investors. However, for the 75,000 Prokon investors, the new rules will come too late.
What’s incredible is that it’s always the same people making off like a bandit. And politicians still continue demanding more renewable energy! Makes you wonder who is in charge inside the henhouse.
All good financial investment scams require a large number of “bag holders” who willingly give away hard earned money to the scam artist. We saw this with Bernie Madoff for example, but Madoff’s scam wasn’t government sanctioned like Al Gore’s carbon trading scam was and that is what makes the difference between receiving a Nobel Prize and receiving 20 years in jail.
And don’t forget –
Free Jon Corzine!
As my Granny used to say, a fool and their money are soon parted.
Pointman
Hmm…I thought the company’s name was Procons.
[…] Gosselin på NoTrickszone följde upp detta häromdagen. Vindföretaget Prokon startade 1995 och har vindkraftsparker inte […]