United Cacao Breaks AIM Rules – Business Wire (press release)


LONDON–()–EIA has issued the following:

Today over 60 indigenous organizations and NGOs from Peru, Europe, and
the United States called for United Cacao Limited SEZC (ticker symbol:
CHOC) to be removed from trading on the Alternative Investment Market
(AIM) of the London Stock Exchange. As the basis for their demand, the
groups cited the company’s breaches of AIM rules and illegal
clear-cutting of Peruvian rainforests, claimed and depended upon by
Indigenous Peoples for survival. In a sign on letter to the exchange and
UK market regulators, groups made clear connections between financing
raised on AIM, the London Stock Exchange’s junior market, and at least
11,100 hectares of illegal deforestation in the Peruvian Amazon by
United Cacao’s direct subsidiary, Cacao del Peru Norte, and two related
companies, Plantaciones de Pucallpa and Plantaciones de Ucayali.

Each of these three Peruvian companies has derived significant financing
from the AIM-listed company, United Cacao, which in addition to trading
in London, is based offshore in the Cayman Islands, a British Overseas
Territory. United Cacao began raising funds in London on AIM in December
2014, despite ongoing Peruvian government actions to sanction its
subsidiary, related companies, and their employees for breaking Peruvian
laws governing forests and agriculture. United Cacao’s CEO, Dennis
Melka, controls a network of at least 25 corporate entities based in
Peru.

“The illegalities, abuses, and forest destruction perpetrated by Dennis
Melka’s companies in the Peruvian Amazon have been public for years now.
In spite of the Peruvian government having ordered the companies to stop
operations and comply with the law, they continue to systematically
violate Peruvian laws and ignore the Peruvian authorities,” said Julia
Urrunaga, EIA´s Program Director in Peru, and Peruvian citizen. “A model
of illegal forest destruction, violation of indigenous rights and
disrespect for the national authorities is not the kind of investment
that Peru needs or wants.”

Alongside the letter, the Environmental Investigation Agency also
published a detailed evidence briefing, including dozens of primary
source documents from Peruvian government entities which contradict
claims made by United Cacao on AIM and surface serious omissions of
relevant information. This is the second blow for United Cacao in a
week, after the Roundtable on Sustainable Palm Oil ordered related
company, Plantaciones de Pucallpa, to immediately stop operations
through a preliminary resolution released on April 25, citing evidence
that the company had violated indigenous rights and was in
non-compliance with multiple Peruvian environmental standards.

“If AIM and UK financial regulators do not investigate and sanction
United Cacao, they will be sending a signal that UK markets are a
profitable place to bet against law enforcement, environmental
sustainability, and human rights in countries like Peru,” said Rose
Davis of Environmental Investigation Agency. “After the egregious
non-compliances presented today, the only logical conclusion for AIM is
to remove United Cacao from trading on the exchange, and to publicize
these consequences to dissuade market actors from further abuses.”

The letter also calls upon UK regulators, like the Financial Conduct
Authority, to investigate whether United Cacao’s breaches of AIM rules
have violated other UK laws or regulations intended to prevent market
abuse and misleading statements by corporations. Putting the focus
squarely on London’s role in global finance, the letter represents a
clear outcry by civil society against the abuses related to land
acquisitions and plantation development of cacao, oil palm, and other
agro-commodities at the expense of forests and community lands.

“In the Peruvian Amazon, 20 million hectares of land customarily
occupied and owned by Indigenous Peoples still lack formal titling,”
said Sedequías Ancón Chávez, member of the council of directors of the
Interethnic Association for the Development of the Peruvian Amazon
(AIDESEP), the largest organization of indigenous Amazonian communities
in Peru. “Actions like this, with the participation of local, national,
and international civil society, and supported by indigenous
organizations like ours, are key to revealing the links between large
scale agro-industrial investments and their social and environmental
impacts in countries like Peru, which are affecting and threatening our
rights, territories, forests, and livelihoods.”

References

(1) Letter from over 50 indigenous and civil society groups to the
Alternative Investment Market of the London Stock Exchange. [Available
here
]

(2) Environmental Investigation Agency. (2015, May 4). “London Stock
Exchange Financing for Illegal Deforestation in Peru via AIM-listed
United Cacao Ltd. SEZC.” [Available
here
]

(3) Roundtable on Sustainable Palm Oil. Case Tracker: Plantaciones de
Pucallpa. [Available
here
]



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