Ostrich action ruffles investors' feathers

Livestock litigation seems to be in vogue with the current beef scare. But cattle are not the only animals at the centre of court action – ostriches are also legal flavour of the month.

The fate of the beleaguered Ostrich Farming Corporation (OFC) is now to be decided by a High Court judge after it resisted moves to wind it up in the Companies Court.

An application by the DTI to dissolve the Mansfield-based company was put on ice by agreement after OFC counsel Raquel Agnello told Mr Registrar James that the company needed more time to prepare its defence.

In a court packed with OFC investors, the judge adjourned the case to be heard urgently by a High Court judge, almost certainly before the High Court rises for the summer vacation at the end of July.

OFC has around 2,000 birds on ostrich farms in Belgium and is thought to be the largest corporation of its kind. However, it has been ordered to cease trading by the High Court and is currently the subject of a three-pronged investigation by the DTI, the Advertising Standards Authority and the Serious Fraud Office. The Official Receiver has been appointed as its provisional liquidator.

OFC attracted millions of pounds of investment by guaranteeing annual returns of over 51 per cent.

In its winding up petition, the DTI said the scheme is bound to collapse as soon as saturation point is reached and insufficient new members join.

According to the petition, ostriches were sold at market price by ZooPark Amo-Safari, the Belgian farm where the ostriches were kept, to two intermediaries – Wall Street LLC and Wall Street Corporation.

The birds were sold from Belgium on to OFC at higher prices and OFC also received substantial sums for distribution rights. Individual owners are said to have paid between £6,000 and £14,000 for hens.

At the recent hearing, Christopher Harrison, counsel for the DTI, told the judge that while agreement had been reached that the case should be adjourned to a High Court judge, it should be heard as a matter of urgency in view of the level of public interest in it.