You’d think that after some of the world’s most eminent marine biologists attacked it; the IPCC report dumped on it; and the IMO’s scientific group to the London Convention last week passed the equivalent of an emergency motion advising it not to proceed - that Planktos Inc. would go to ground or hoist a white flag before it sinks in embarrassment. Certainly, its gambit - dumping somewhere between 45 and 100 tons (depending on who at Planktos you talk to and when) of iron dust or nanoparticles (depending on who at Planktos you talk to and when) near the Galapagos Islands (depending on who at Planktos you talk to and when) seems doomed. Amazingly, some newspapers picked up a stunningly self-serving advertisement masking as an op-ed piece penned by Planktos CEO Russ George last Saturday. George passionately trumpeted his green credentials and claimed to be on the side of the environmental angels. It was truly astonishing that this advertisement got so much weekend coverage just one day after an intergovernmental science body attacked the exercise.
However, also last Saturday, a columnist, David Baines of the Vancouver Sun, published the report reproduced in full below. In our own search for financial information about Planktos the convoluted trail seemed to lead back to a used car firm incorporated in Delaware; a Panamanian millionaire; and some other purportedly high-tech sister enterprises involved in nuclear power, cold fusion, tree-planting and just about anything else you can imagine. David Baines says that Planktos’s real boss is actually a rather well-known Vancouver hustler who was accused by the RCMP of taking $2 million in the late 80s and convicted (in a separate case) of misappropriating $100,000 in the late 90s. He had to wear an electronic monitoring device for a year. The guy has had a stack of get-rich-quick investment schemes including a coin-operated mechanical arm-wrestler. The columnist concludes that investors had better beware.
• Wildrose Ventures Inc. Investors: Beware jumping on the carbon-credit bandwagon Vancouver Sun Saturday, June 23, 2007 Page: F2 Section: Businessbc Byline: David Baines Column: David Baines Source: Vancouver Sun
I was surprised to see him, but there he was, as rakish as ever in his summer suit and flowered tie, the crow’s feet around his eyes a little deeper, but just as responsive to his broad smile. The smile soon gave way to circumspection as I starting asking Nelson Skalbania about his involvement in what may be the most controversial OTC Bulletin Board company in North America, perhaps the world.
Planktos Corp. has made headlines in newspapers around the globe, including the New York Times and the Daily Telegraph, on account of its plan to toss 45 tons of iron filings into the South Pacific Ocean near the Galapagos Islands. The theory is that this will stimulate plankton growth, which will promote the absorption of carbon dioxide and impede global warming. The idea, the Times noted, is similar to planting forests full of carbon-inhaling trees, which is what Planktos is also doing in Hungary. So how will Planktos make money from these ventures? In both projects, environmentally conscious corporations and individuals will have the opportunity to offset the carbon dioxide they emit by paying Planktos a few dollars for every ton of carbon dioxide their projects absorb from the atmosphere.
The brains behind Planktos is Russ George of Foster City, Calif. According to SEC filings, he has “a classical education in ecology followed by business experience in life resource industries”, and is a “recognized expert in advanced nuclear physics.” In August 2005, George agreed to sell his company, Planktos Inc., to a Vancouver-based bulletin board company called Solar Energy Ltd. for $1.5 million. Solar has since agreed to sell the business to another bulletin board company called Diatom Corp. for 45 million shares. That will give Solar a controlling interest in Diatom, which is now trading as Planktos Corp. Skalbania is neither an officer nor director of Solar, but his footprints are all over it.
Solar’s principal executive office is listed as 145-925 West Georgia St., which is Skalbania’s office. Skalbania’s business card describes him as “manager” of Solar and a director of Planktos Inc., which operates as a subsidiary of Solar. He also owns big blocks of Solar stock through two private B.C. companies, Baycove Capital Corp. and Regal RV Resorts Inc. He is also a big booster. When I dropped into his West Georgia office, he tried to persuade me that Planktos has viable solutions to global warming. He appeared genuinely enthusiastic, but I have trouble sharing that enthusiasm. As a businessman, Skalbania has had a very checkered career. In the early 1980s, his highly levered business empire collapsed, leaving behind dozens of creditors who were owed millions of dollars. He then turned to the stock market, where he became involved in a series of Vancouver Stock Exchange companies. One was Ponderosa Ventures, which rose to $5 on the basis of a series of acquisitions that eventually went bankrupt. One of those acquisitions was Columbia Trust. In 1987, RCMP alleged in search warrant information that Skalbania converted for personal use nearly $2 million of a $3-million loan provided by Standard Chartered Bank to Columbia Trust.
The RCMP recommended that charges be laid, but to their chagrin, the Crown decided not to proceed. There were many other questionable stock deals, including Westlake Resources, Stardust Ventures, Wildrose Ventures, and Gametek Systems, a ridiculous deal involving a coin-operated arm-wrestling machine. Then there were his ill-fated sports ventures, which included the Montreal Alouettes and the B.C. Lions. Both ended up in dire financial straits. In 1997, he was charged with theft after he took $100,000 from a Richmond businessman for a prospective real estate deal. Instead of holding it in trust, he used it for personal purposes. He returned the money before the Crown charged him, but he was still found guilty and sentenced to one year of electronic monitoring.
Now he is leading the charge for Planktos. In February, Planktos Corp. announced that a Vancouver hotel, the Wedgewood, had agreed to buy sufficient carbon credits to offset the estimated 500 tonnes of carbon dioxide it emits each year for the next 10 years. “The Wedgewood has always been a good corporate citizen and given the very real threat now posed by climate change, we have decided to act locally and sensibly for the global good,” general manager Philip Meyer was quoted as saying. Not mentioned was the fact that Skalbania is married to Eleni Skalbania, who owns the Wedgewood, so it is hardly an arm’s-length deal.
Planktos’ releases are extremely promotional. On Thursday, for example, it issued one under the headline: “Planktos Calls for ‘All Hands on Deck’ Emergency Response to Prevent Massive Plant Life Extinction in the World’s Seas.” The U.S. Environmental Protection Agency has expressed serious concerns about Planktos’ plan to seed the ocean with iron filings, but the company insists there is no environmental risk and is pushing ahead with its plans. All of this has stimulated much media publicity and investor interest. The share price of Planktos Corp. has more than tripled this year to $1.32 US, for a total stock market value of nearly $110 million US. Solar Energy, which will soon have a controlling interest in Planktos Corp., hasn’t fared as well: Its stock has moved laterally at 57 cent US, for a total stock market value of only $12 million US. Although Planktos has no operating history, carbon credits are in vogue these days, and it won’t take too much promotional effort to get both these babies moving. Investors should be wary. These environmental saviors could easily become financial hazards. dbaines@png.canwest.com
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