ASIC go on the defensive after ANR exposes them for trying to cause $5.5m in deliberate losses to land banking investors

ASIC go on the defensive after ANR exposes them for trying to cause $5.5m in deliberate losses to land banking investors

0 Reads  By: Staff Reporter

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ASIC in an unusual step has rushed a poorly written response to questions they have been receiving from the public and furious investors regarding the land banking projects it’s attempting to sabotage.

It seems unusual for the ASIC to provide such a response and shows they are clearly rattled by the exposure of ASIC trying to cause deliberate losses to innocent investors by an ANR special investigation released in recent weeks.

Both mainstream newspaper companies have failed to ask serious questions of the ASIC in this matter amongst others. Moreover, ASIC isn’t used to having their tactics being questioned and being made to respond.

Below is the response ASIC has uploaded to its website

http://asic.gov.au/about-asic/media-centre/key-matters/21st-century-group-land-banking-proceedings/

ANR has sought a spokesperson for the 21st Century Group for their response to ASIC claims and added a fact checker to see who is presenting fact or fiction. 

ASIC published FAQs regarding taking legal action against 21st Century Group. 
Following is a fact check and 21st Century’s reply:

Why has ASIC taken action against the 21st Century Group over land banking? 

ASIC Response:

ASIC commenced proceedings on 3 August 2015 in the Federal Court of Australia against companies associated with Jamie McIntyre and the 21st Century Group in relation to the promotion and sale of interests to investors in five land banking schemes.

ASIC alleges that the schemes are unregistered managed investment schemes and/or financial products and that the 21st Century Group companies and Mr McIntyre and his brother Dennis McIntyre have been unlawfully carrying on an unlicensed financial services business.

The five schemes are promoted and advertised as:

  • Botanica, located at 805 Archer Rd, Kialla, Victoria 3631
  • Secret Valley Estate, located at 955, Old Sydney Road, Bylands, Victoria 3762
  • Oak Valley Lakes Estate & Resort, located at 124 Booth Road, Brookhill, Townsville, Qld 4816.
  • Bendigo Vineyard Estate & Resort, located at 51 Andrews Road, Bendigo, Victoria 3551
  • Melbourne Grove Estate, located at 1491 Dohertys Road, Mount Cottrell, Victoria 3024

 

What orders does ASIC want the Court to make?

 

ASIC Response:

ASIC is seeking interim and final relief.  By its interim application, ASIC is asking the court to appoint provisional liquidators or receivers and managers to each of the five schemes and the development companies in order that an investigation and report into the management of the five schemes can be prepared.  Later, at the final hearing of its claims, ASIC will ask the court to order that the respondents have been operating a managed investment scheme, and to wind up the development companies that have been conducting the schemes, as well as the schemes themselves.

The development companies are:

  • Archery Road Pty Ltd (ACN 162 921 735)
  • Bendigo Vineyard Estate Pty Ltd (ACN 600 088 211)
  • Secret Valley Estate Pty Ltd (ACN 602 817 532)
  • Kingsway South Holdings Pty Ltd (ACN 159 230 976)
  • Melbourne Tarneit Estate Pty Ltd (ACN 603 945 393)

ASIC is also alleging that the development companies and the following companies and individuals have carried on an unlicensed financial services business.

  • Mr Jamie Neville McIntyre
  • Mr Dennis McIntyre
  • Property Tuition Pty Ltd (ACN 129 421 281)
  • Education Holdings Pty Ltd (ACN 129 551 917)
  • Sourcing Property Pty Ltd (ACN 602 474 779)

ASIC will also seek final orders that each of the defendants, including Mr McIntyre, be permanently restrained from promoting, further promoting or operating any of the schemes and from operating a financial services business.

21st Century Group Response:

The correct answer is, ASIC took action because they work closely with Fairfax Media. Since 2013, Fairfax Media have been running a concerted smear campaign against McIntyre ever since he founded a center right party “21st Century Australia” and ran in the last Federal Election.

In order for ASIC to get approved funding from their budgetary department to conduct an investigation to target land banking, it needed a reason. Fairfax Media planted numerous stories in The Age and Sydney Morning Herald newspapers claiming that investors had lost $100 million and possibly up to three times that amount in land banking projects associated with McIntyre.

ASIC used these deliberately false stories as justification to get funding approval to go after 21st Century land banking companies.

It has not been proven that a single investor in 21st Century land projects or any projects it has ever marketed have lost a single dollar. Moreover, ASIC has not investigated any other companies within the land banking industry whatsoever.

The only company they have investigated is The 21st Century Group and it occurred because the CEO and founder Jamie McIntyre approached ASIC to freely share any information so they could address any concerns they may have with the company.

ANR Fact Check:

It’s true. Fairfax Media did plant and run stories making up the allegations as evidenced clearly by searching online.

It’s also true that Fairfax claimed $100 million and possibly up to three times this amount was lost.

Yet no evidence exists that any losses have occurred and the claims have been proven to be false. One could conclude these claims are deliberately false, as Fairfax Media refuse to retract or correct such articles or provide any evidence.

21st Century Group Response:

ASIC also wrongly claim that the 21st Century Group is promoting unlicensed Managed Investment Schemes.

This is an unproven allegation. Also, one must question that why after decades of property options being around have ASIC now decided to deem it as a financial product under financial services law?

And why, are only McIntyre’s companies being targeted out of the large property sector where it’s common for developers to use property options?

Legal advice states that property options are not a financial product. McIntyre’s companies offered to license the projects some months ago, but regardless, ASIC refused to allow that.

Three of the projects have less than 20 investors and no pooling of funds has occurred.

ANR Fact Check:

It is a fact that Property Options have never been classified as a financial product in the past and according to legal advice ANR has sighted it isn’t.

It seems to be an allegation that is far from being proven and even it ever was (and if the matter gets to trial), it doesn’t explain or justify ASIC’s attempts to appoint liquidators considering it will cause losses to investors.

ASIC are known for trying to appoint liquidators to win by default in cases where it’s unlikely they would win a trial. It appears they are using this tactic again, which is a clear abuse of process.

Why do managed investment schemes need to be licensed?

ASIC Response:

Essentially, most managed investment schemes are required to be registered so that investors have the benefits and protections of the regime for such schemes as provided for in the Act.

In most cases, it is illegal to offer units or interests in what is actually a managed investment scheme unless the scheme is registered with ASIC.  Also, if the developers and promoters are legally running a managed investment scheme, they must have an Australian Financial Services Licence (AFSL) authorising them to conduct the scheme.

If the investment is a managed investment scheme you must be given a product disclosure statement (PDS). A PDS must include information about the scheme’s key features, fees, commissions, benefits, risks and complaints handling procedure.  A PDS helps you to be fully informed about the investment before you invest.

21st Century Group Response:

The 21st Century Group has always endeavored to fully comply and co-operate. They offered to license the projects even though legal advice stated they don’t need to be.

ASIC has refused to co-operate and allow licensing to occur in order to protect investors. Therefore, it is evident that ASIC isn’t interested in projects being licensed (they have not requested any other company in the industry to be licensed either, which also highlights their clear bias). It appears to be a political witch hunt against McIntyre for entering politics. By launching a new political party, that is prepared to spend millions of dollars to upset the current political duopoly that frustrates voters. 21st Century Australia is pushing for a modernised 21st Century political system and common sense in politics.

The 21st Century Group has owned two AFSL’s in the past, and recently acquired a company with an AFSL to license its land projects and resolve the issue.

ANR Fact Check:

It is proven that 21st Century did in fact offer to resolve the matter by licensing the projects and ASIC has continually refused and then took court action.

It’s confirmed that The 21st Century Group did previously own two AFSLs and did recently acquire a company that owns one suitable for licensing such projects.

Have bank accounts been frozen? 

ASIC Response:

No, ASIC has not sought orders from the Court freezing frozen bank accounts of the development companies.

ASIC is seeking orders that all of the respondents to the proceeding, including the development companies and Jamie and Dennis McIntyre, cease doing anything in furtherance of the schemes including receiving, soliciting or disposing of any funds in connection with the schemes.

21st Century Group Response:

The 21st Century Group has voluntarily offered to cease sales of land banking options and soliciting any more option sales.

Why would provisional liquidators be necessary for a proper investigation and to access bank account information?

ASIC has already received access to all bank statements; they get updates from direct payments from the banks and have already conducted a detailed investigation.

This claim by ASIC is nonsensical and another of their blatant lies to deceive the public and investors.

ANR Fact Check:

ANR has confirmed ASIC have investigated the matter for months and have had access to bank statements and already know the exact use of funds.

21st Century Group Response:

The 21st Century Group agreed months ago to suspend sales and stop collecting sales proceeds and using option sales revenue.

Not only was this request by ASIC adhered to, their attempt to sabotage the projects by cutting off significant income from option sales failed to cause The 21st Century Group to collapse, which was believed to be part of ASIC’s deliberate intention.  At this point there is no certainty that ASIC’s allegations that it is an unlawful managed investment scheme is correct.

ANR Fact Check:

It has been verified that ASIC do not need to freeze bank accounts as 21st Century Group had already given action to cease collecting option sales revenue or use it until court matter is heard.

Why do Provisional Liquidators need to be appointed?

ASIC Response:

In addition to ASIC’s concern that the development companies are unlawfully operating managed investment schemes, ASIC is further concerned that:

investor funds have been removed from the development companies’ bank accounts;

the option fees paid by investors have been transferred to related companies within the 21 Century Group;

the relevant councils have stated that the underlying land which is the subject of the land banking developments will not be, or is highly unlikely to be, rezoned as residential land in the foreseeable future.

21st Century Group Response:

Why would ASIC need provisional liquidators appointed if the 21st Century Group has offered refunds of the option holders to simply resolve the matter and license the projects.

How can ASIC publicly state that it needs to appoint liquidators to protect investors when investors could simply be refunded, as offered by the 21st Century Group? This exposes just how deceptive the ASIC is, as they continually refuse to allow this.

They consistently post on their website claims that are simply ludicrous and blatantly false.

ANR Fact Check:

It’s is true that ASIC has and is refusing to allow option holders to be refunded by the 21st Century Group and the group will now apply to the courts to demand ASIC be prevented from stopping option holders to access refunds.

21st Century Group Response:

Questions the public and Option Holders should ask the ASIC:

 

“What are the real reasons ASIC want to purposely lose option holders’ invested money by appointing liquidators when it’s clearly not necessary or in option holders’ best interest?’’

 

The real reason: ASIC got funding based on planted stories by Fairfax Media claiming $100 million or more was lost and now that’s been proven to be a lie. Therefore, ASIC is embarrassed and need to ensure the losses are incurred to save face.

 

The only way possible for investors to lose their option rights is by ASIC getting liquidators appointed.

 

Liquidators don’t care about investors. They care about one thing – taking as much money as they can in fees. ASIC know this. If liquidators are appointed banks, lenders will fire-sale the assets. In 20 years these assets would be worth a lot of money whether or not rezoning occurs.

 

Investors already have in built protection over their asset unless ASIC get liquidators appointed to stop this.

 

The liquidators also have no expertise or desire to fund monies long-term like the 21st Century Group to move the projects towards development.

 

ASIC claim that they have spoken to councils and the land won’t be rezoned in the foreseeable future. Bureaucrats working for ASIC have little to no experience in land banking and property development. Thus their level of knowledge forbids them from understanding that land banking is banking land to be ideally developed in 10-20 years’ time. So, they are not meant to have rezoning yet.

 

In saying that, one of the projects marketed by 21st Century (the largest project) has residential rezoning approved and permits already. Another project is (according to council) expected to be rezoned in 2017 or 2018 and is already within an Urban Growth area.

 

All of the land projects have been acquired in areas where the Councils have recently allowed farmland (that is outside Urban Growth Boundary and outside the current council guidelines) to be rezoned to residential and development sites.

 

ASIC’s bureaucratic ignorance should not be allowed to cause investors the losses it would if ASIC win the case.

 

Option holders purchased an option. It’s a fee for service.

 

Under the option agreement, ‘The Developer’ is not obligated to use those funds for any specific purposes and ‘The Developer’ can use its own funds, as it feels fit to further the project.

‘The Developer’ simply agrees to refund option holders in 20 years and offer security over the land asset if it fails to get rezoning approval.

 

The option fees can be paid to other companies within the 21st Century Group for covering of administration expenses etc.  They aren’t pooled nor required to further the investment.

It’s up to ‘The Developer’ to use whatever funding it chooses to further the developments.

 

Once again, bureaucrats in government departments need something to investigate in order to have a job.

Their lack of knowledge on investment strategies should not be allowed to cause deliberate and premeditated losses to innocent option holders who have the legal and democratic right to invest without undue unnecessary government interference.

 

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