McIntyre and his investors set to sue a Bendigo land banking syndicate for “profoundly misleading his investors and him out of tens of millions”. He blasts ASIC for making matters worse and refusing to help investors.
The high profile saga and court cases into land banking continue dragging slowly via the courts, which is now set to see more legal action- this time by Jamie McIntyre and his investors who said they were all “profoundly mislead” by the secretive syndicate of developers behind the two projects his company marketed property options for years ago.
McIntyre and some of his investors are looking to join legal action against Midland Hwy and Bilkura Investments for “profoundly misleading 21st Century about the use of the options money raised and want the project to proceed so his clients can profit or get their money back and receive compensation for damages such as brand damage caused to 21st Century by being linked to the secretive syndicate behind the Acacia Banks (renamed Hermitage Project) in Bendigo.
21st Century also believes ASIC only took action against its five land projects, which only have $6.8 million in option holders and full disclosure because it wrongly believes 21st Century is part of the secretive syndicate that received $28 million in option fees ($15 million of it from 21st Century and its investor clients) when evidence shows it clearly never did.
McIntyre is also scathing of ASIC for acting against investor interests stating that their interference has only caused losses, which wouldn’t have occurred otherwise, especially since they could have easily acted in a way to protect investors as number one priority and not act in ways where it seems to maximise their losses and then blame him for other parties losses.
He said he voluntarily approached ASIC to address any concerns they may have with land banking and his five land projects and also to ask for their assistance regarding the $4.7 million in options his clients and he had invested into 805 Shepparton. However, the developers put the project into administration shortly after receiving the money.
This led to McIntyre bailing the project out and reportedly spending over $1millon in fees and acquisition costs and taking over a $4.7 million liability to protect his investors.
McIntyre clearly said, “I’m not the crook in all this, as I never received the money in these two projects. Why would I be bailing my clients out if I weren’t protecting their interests?
“Yes, I may have been fooled and a lot smarter people than I have been fooled before, but I have always done the right thing by my clients, as evidenced by bailing out the $4.7 million Shepparton Project and efforts to offer refunds in all 21st Century projects three times before ASIC appointed provisional liquidators destroying the projects and causing losses deliberately to frame me”.
He said, ASIC has massive powers and can easily demand information to find where his investors’ money went. However, they did nothing over the Shepparton project.
“The administrators that I bought the project from to protect my clients also complained that ASIC did nothing, he said.
But McIntyre believes ASIC is simply not interested in helping.
“At the time I wasn’t sure if it’s simply from pure laziness on their behalf, or that they don’t really care about investors, or perhaps they thought as I’ve covered the investors’ losses myself, they don’t need to intervene”, he said.
But later it would be found that ASIC had an ulterior motive.
It is believed by some that they were then pressured from certain suspect Senators who represent the worst of the dodgy unions in Australia (they saw him as a future political threat from the political party that he founded with over half a million dollars in 2013 and entered politics, which was very intolerant of union corruption) to frame McIntyre and attack his land banking projects to destroy his business interests and future funding for his party.
McIntyre said his company had also sold $15 million approximately in land options in Acacia Banks Bendigo, which was zoned residential and eventually received council approvals to go ahead.
“The project passed due diligence and we were very bullish on Bendigo, as it has been one of Australia’s best property hot spots for years. We had many clients requesting us to find them another project to invest in with use of property options, as they were becoming a popular tool for savvy investors to get into property without borrowing money or being obligated to purchase if the market turned”, explained McIntyre.
He said the project progressed via the council approval stages and all was fine until the landowner passed away and the family put the company into administration.
McIntyre thought, “not again”.
It would have cost him a fortune to bail this project out and started making enquiries to try and buy the site if it was put on the market to protect his investor clients.
He said $28 million in options were sold in the Acacia Banks project via Midland Hwy PTY LTD.
McIntyre says about $15 million of this was sold to his investor network for the Bendigo Project and rest via other agents not related to his companies, as 21st Century were only the original agent and had offered the options to select clients who had paid a membership to access such deals.
“However, as our potential for brand damage increased if the third party developer didn’t deliver, the 21st Century Advisory Board became more and more concerned at the lack of transparency about who actually controlled the developer syndicate behind the deal”, he said.
McIntyre said it got to the point where the CEO and Manager of our Property Division were hauled before the board to provide full and proper disclosure, but it was never forthcoming and they left the company shortly thereafter.
We were told we could meet with their project manager only and that the developers were very wealthy private individuals who didn’t want to be dealing with its various agents directly. However, they continually assured 21st Century that things were on track but refused to show proof of funds.
The Advisory Board became fed up with the apparent stonewalling and lack of transparency. They demanded that all sales of options to its clients for the project cease and assurances get proven to show where the $15 million raised was being used and who controlled it.
21st Century subsequently let go of the CEO and Sales Manager. At the board level they decided it would only offer the sale of options in its own projects to avoid third party developer risks such as this.
A spokesperson said it has been incredibly unfair and unjust that the left wing media reports by Fairfax keep attacking 21st Century and its CEO over the land banking projects. These allegations have been looked upon as preposterous, especially considering 21st Century has done everything to not only protect its clients, but also ensure they get the profitable outcome they acquired options for in land projects. It wants ASIC to let the projects complete rather than sabotaging them and stopping them, which only leads to unnecessary investor losses, which then ASIC tries to pin back on 21st Century despite evidence to the contrary that proves 21st Century never received the money in this project and should not be held accountable while the secret syndicate gets away with $25 million.
The spokesperson said the Acacia Banks Options did not make 21st Century one single cent.
“In fact, it has lost close to $1 million from the cost of staff time, management and costs associated to sell $15 million in property options for the net 20% fee it was to be paid. 20% sounds like a lot but it’s before costs so it can’t be compared to what financial advisor fees are. We were paying 5-10% of this to consultants plus retainers etc. before management and group overhead.
“The secretive syndicate behind the project received close to $28 million. Yet, we received only about $3.8 million in net fees on expenses close to $5 million, i.e. a loss”, said the spokesperson.
He said, “we provided the developer with a cashflow to the tune of $15 million, which it now appears they used largely to fund other land projects and never disclosed this as they knew we would have never sold options on that basis”.
The 21st Century Spokesperson went on to state:
“If we were not profoundly misled, we would never have sold so many options for a developer for a fee not great enough to even cover costs nor the money being used ensuring the project is completed. Moreover, we would have never done this for them to effectively fund a project where they make potentially hundreds of millions and we lose money yet provide the sales. Or worse, they used most of the option money for other projects making themselves even more money and leaving 21st Century with the headache to bail out its clients at great expense and get attacked relentlessly in the media and have ASIC take action against 21st Century whilst the perpetrators get off scot-free costing 21st Century an estimated $20-$30 million in losses devastating the group leading to majority of its staff losing their jobs.
“We are being made the scapegoat, as we are an easy target that’s transparent and not going anywhere and the CEO has a profile to attack. We voluntarily went to ASIC and gave them everything and asked for their help, yet this is how they turn on you and target us.
“Companies need to know that ASIC can’t be trusted, investors need to know ASIC is their enemy and not their friend, as their agendas are not to protect investors but to simply find someone to blame quickly and get press releases to portray wrongly to the politicians that they did their job and saved the world.
“The whole thing leaves a sour taste in everyone’s mouth, especially investors who have been screwed over not only by the secretive developer syndicate but now also by ASIC thus leaving 21st Century hung out to dry.
“ASIC could have supported investors’ wishes when they voted for the project to continue whilst still investigating the syndicate behind it. This way investors win and ASIC could still pursue those who have done wrong. However, ASIC got the Federal Court to overturn investors’ wishes. Why?
“All we want is for the project to proceed or our investors get their money back and for ASIC to remove provisional liquidators from our five projects to stop another $6.8 million in losses to innocent investors, as we shouldn’t have to fight so hard against ASIC to get them to protect investors.
“We are barely asking for much, but I can now see why many believe that ASIC is not only incompetent but malicious in their intent and why the Government wants a full audit done on the corporate watchdog.
“They have been very disappointing and one must question who they answer to and whether they are being manipulated to target people for political purposes or jealous competitors’ purposes”, questioned the spokesperson.