The Australian Quintis backers team up for fight to save outlay...

The Australian
Quintis backers team up for fight to save outlay

TFS founder Frank Wilson, who quit as Quintis MD in March.

• SUE NEALES
• The Australian
• 12:00AM July 28, 2017

Angry investors who fear losing millions in the sharemarket slump of listed sandalwood farming company Quintis have banded together to ensure their interests are not forgotten.

Led by major early investor in Quintis, Teague Czislowski, the action group together owns Quintis sandalwood trees planted on more than 1000ha.

All investors have stakes in TFS’s multiple Managed Investment Scheme projects, in which investors pay to plant, own and manage trees on land they do not own.

Shares in Quintis — formerly known as TFS — crashed in April just as the company undertook a ritzy relaunch to rebrand from being a TFS tree-growing business to Quintis, a company portrayed as a leading provider of sandalwood oil-based health, skincare and beauty products.

The plummeting of Quintis stock followed a massively negative report on the company’s complex financial and investment structure by short-seller Glaucus Research, which concluded that the world’s biggest commercial grower of Indian sandalwood had no value, no major product sale contracts and was a worthless shell built on “Ponzi-like” finance schemes.

Quintis shares entered a trading halt on May 15 — when trading at a rock bottom 29.5c — and have not traded since.

Trading in the shares is due to resume on the ASX on Monday, although another extension is considered likely. Quintis has already extended its trading halt three times.

Mr Czislowski said he had formed the Quintis investor group out of concern that their joint MIS investments may become worthless if the company was thrown into receivership.

Mr Czislowski said he had invested $2.6 million establishing and growing sandalwood trees in eight of TFS’s MIS projects since 1999, all located in the Ord irrigation scheme at Kununurra in Western Australia’s East Kimberley region.

He fears that if Quintis enters administration — following in the footsteps of other ill-fated timber MIS companies such as Gunns and Great Southern — he and his fellow investors face financial “wipe-out”.

Rumours abound that Quintis is facing receivership, after fast expanding its sandalwood plantations into the Northern Territory and north Queensland before its first trees reached maturity at about 15 years and could be harvested, producing core heartwood timber containing high-value sandalwood oil.

“We have continued to pay rent to the landowners where our trees are planted and ongoing tree management fees to Quintis; we have legal ownership rights over our trees, but they are outside the listed company,” Mr Czislowski said.

“As MIS growers, we are appalled Quintis has not contacted us at all and refuses to provide us with information: this is about trying to stop the loss of value for growers in our substantial and long-term tree investments.”

Quintis earlier this month fast-tracked sales of its sandalwood oil at discounted prices to bolster its finances.

Young Living, the largest essential oil company in the world, paid a total of $US8.55m for 2.85 tonnes of sandalwood oil, at a 33 per cent discounted price, as part of a five-year agreement announced last September.

The earlier agreement covered the purchase of 7.8 tonnes of oil spread over five years at a price of $US4500 per kilogram.

This sudden sale of 2.85 tonnes brought forward about two years of supply under the offtake agreement and Quintis received $US6m in cash from the sale.