Aqua Ceres investors to liquidate water holdings amid Sam Mitchell business collapse

Businessman Sam Mitchell is understood to be furious over investors attempting to sell water holdings he previously managed.

Sam Mitchell is understood to be furious over investors attempting to sell water holdings he previously managed. Picture: Simon Dallinger/NCA NewsWire

Investors in would-be cattle baron Sam Mitchell’s water trading scheme have begun liquidating the fund, notching up around $21.8m trade on Friday, amid concerns they may face a loss.

Aqua Ceres told investors in its Australia Water Fund it was moving to liquidate assets after a recommendation from its largest institutional investors, who overwhelmingly backed a vote to wind up the scheme in response to issues surrounding Mr Mitchell.

Mr Mitchell previously managed the fund.

As revealed in The Australian, Mr Mitchell is being pursued by the Australian Taxation Office, investors, and lenders over millions in debts.

This comes after administrators warned a key company in Mr Mitchell’s business empire WealthCheck Management had allegedly traded while insolvent for almost six years.

In an email to investors, Aqua Ceres said it was taking the move to liquidate holdings after “Sam Mitchell, significantly expanded his business interests outside of the Fund, and those business interests have struggled to a point where he has been forced into liquidation”.

Investors were told these issues may have “compromised his focus on managing the portfolio of water entitlements”.

Up to half the current water entitlements held by the fund have now been liquidated with the sale of 2500 megalitres last week.

RuralCo Australia has the exclusive selling agreement to deal with the remaining holdings.

However, Investors were told they faced a loss with returns approximately negative 15 per cent, driven by a decline in the Australian dollar representing a 9 per cent negative return.

WealthCheck and BondiAg boss Sam Mitchell

But Aqua Ceres told investors the announced buyback of water entitlements across southern Australia around the Murray and Darling Basin “should positively impact a significant portion of our holdings”.

“Sixty per cent of the current Aqua Ceres Australia Water Fund is in the 95th percentile by price and volume and would receive a 20 to 25 per cent premium above current market prices,” the company noted.

If Aqua Ceres sees a benefit from these buybacks, returns are expected to be closer to a 1-2 per cent loss.

However, the move to sell the water entitlements has triggered the ire of Mr Mitchell, who has failed to respond to multiple attempts by The Australian to contact the former Bondi businessman.

Mr Mitchell is understood to be currently at his home in the Californian city of San Diego.

In addition to the disputes over water holdings, Aqua Ceres has also removed Mr Mitchell from its agricultural and carbon assets in Australia, several of which are in administration.

Lenders ADM Capital are pursuing Mr Mitchell’s assets in Australia, after seizing control of The Edge TC, a company used to control his interests.

Cor Cordis is handling the wind-up, with a recent administrator’s report raising concerns Mr Mitchell had failed to provide any details regarding assets owned or held by The Edge TC.

An $11.3m plane owned by Mr Mitchell is currently for sale.

ADM Capital is also seeking to bankrupt Mr Mitchell amid a dispute over a $18m debt.

However, despite the trouble facing Mr Mitchell and the collapse of his business empire, several staff of the former WealthCheck company continue to assist the would-be cattle baron.

The Australian understands a number of staff are still working with Mr Mitchell, including chief technical officer Max Reynolds, despite in some cases being owed hundreds of thousands of dollars in unpaid wages.

Mr Reynolds did not respond to requests for comment.

Several other former staff have attempted to pursue Mr Mitchell, claiming they were owed significant amounts of unpaid wages.