The chairman of a Senate inquiry into forestry managed investment schemes is alleging criminal conduct by some of the parties involved.
Tasmanian Greens Senator Peter Whish Wilson also questioned the integrity of some banks and financial advisers.
He said some advisers did not disclose large commissions they would receive, when signing investors up.
Public policy advisor John Lawrence ( TT here ) told an inquiry hearing in Launceston that Managed Investment Scheme tax incentives created an unsustainable supply-driven market.
He said some of the projected yields from the plantation forests were grossly overstated.
Mr Lawrence also said some proponents actively sought to hide the facts.
“The first scheme that I ever saw the harvest results for, it yielded less than half what was predicted,” he said.
“They had to organise an associated company to buy the timber, in order to inflate the prices received.
“Because I was a tree grower too, I knew that the growth rates being achieved by these other schemes weren’t anywhere near what they said.
“In 2008, Great Southern showed signs of real distress, and it finally became public that they were struggling financing their operations.
“Managed Investment Schemes, as they were run, is an awfully expensive way for governments to encourage a plantation industry.
“That is basically the lesson, and for investors, beware.”