Northern Australian landowners have been left more than $1 million in debt amid the winding up of a major sandalwood managed investment scheme (MIS) portfolio.
The money is owed for land leased by Quintis subsidiary Quintis Leasing and used for MIS plantations.
The ABC's conversations with creditors indicate the unpaid contracts have negatively impacted at least six separate businesses, many of which are family-run.
Quintis Leasing has been placed into voluntary administration following an announcement by Quintis in December regarding an assessment by KPMG, which found the schemes were not financially viable.
Accusations of trees going to waste
Robert Boschammer, a farmer in the Kimberley's Ord Valley, is owed more than $300,000 in unpaid lease payments by Quintis Leasing.
With Quintis Forestry no longer obliged to harvest the MIS plantation on the leased land, Mr Boschammer believes the responsibility to remove the thousands of trees on his land will fall to him.
"[Quintis Leasing being in] administration means we've got no power as lessees to take the land back and decide what we're going to do with it," he said.
"We are stuck in limbo."
Administrators would not comment on the process.
The KPMG assessment was commissioned by Sandalwood Properties Limited (SPL), the independent body responsible for MIS sandalwood plantations managed by Quintis Forestry.
The findings prompted SPL to lodge an application with the Supreme Court of WA to wind up their sandalwood projects planted from 2007 to 2016.
Mr Boschammer believes the costs of removing the trees from his land will be nearly $5 million.
"Quintis Leasing said to us before they went into administration that the leases will be forfeited. They will be given back to us," he said.
"Now I'd like them to actually make that decision and do it straight away so we can do something to manage the trees.
"Otherwise I'd like them to actually start paying some money towards [the lease] and take responsibility for the trees so they don't deteriorate."
A tax incentivised collapse
Managed investment schemes were introduced by the federal government under former prime minister John Howard to investors in 1998, aimed at encouraging agricultural diversification following the decline of the local forestry industry.
This came via tax incentives, which allowed investors to deduct their investments from their taxable income.
There have since been two federal reviews of the MIS structure, following the failure of seven major MIS forestry projects between 2008 and 2012.
University of Melbourne professor of finance Kevin Davis said the special tax concessions for agribusiness MIS investments encouraged unsophisticated investors to make risky investments.
"The fact that you can make this investment and deduct that amount against your current taxable income, and therefore reduce your taxes, is a plus in the way people's psychology operates," he said.
"Basically they discount the future."
Quintis raised $248 million in upfront fees between 2002 and 2016 from more than 21,000 investors in its MIS sandalwood.
Oversupply blamed for MIS failure
Quintis chief executive Richard Henfrey said the structure of the MIS system, in which investments occurred during plantings, only exacerbated the oversupply of sandalwood that prompted SPL to wind up the MIS projects.
"Yes, [those running the schemes] were certainly incentivised to sell more plantations," he said.
While Quintis has made some small plantation offloadings in the past 12 months, Professor Davis questioned its decision to remove the investors' sandalwood from the market instead of Quintis' sandalwood.
"An obvious question would be, if there's an oversupply [of sandalwood], why aren't [Quintis] pulping some of their own stuff?"
To this, Mr Henfrey said the answer was not that simple.
"Quintis forestry wasn't a party to the decision to wind up the schemes. That decision was taken by Sandalwood Properties which, while a Quintis subsidiary, operates entirely independently," he said.
Mr Henfrey is one of the three members on the SPL board.
"I do accept that the likely outcome of the winding up of schemes is that a chunk of that sandalwood resource will be taken out of the market, but I think that it's an unavoidable consequence," he said.
Indian sandalwood takes 15 to 20 years before it is ready for harvest for use in a range of fragrances, cosmetics, traditional medicines, furniture and handicrafts.
Quintis manages the largest area of Indian sandalwood in the world.
In 2018, United States short-seller Glaucus Research Group accused the company of inflating prices for heartwood and sandalwood oil, and preventing outsiders from accurate price information.
"I can certainly imagine that it was very difficult to work out where to set the price [on initial MIS sandalwood tenders]," Mr Henfrey said.
"But those tenders were competitive. There were other bidders in the tenders, so I think the market price became visible relatively quickly."