SENATOR MATHIAS CORMANN
Dear Mr. Cormann,
RE: URGENT COMPENSATION FOR VICTIMS OF STERLING FIRST GROUP COLLAPSE
ROYAL COMMISSION into ASIC
I am writing to you in hope that someone in government takes the above case seriously. We are after all Australian citizens and you, as government, work on our behalf and for our good.
I have written letters to ASIC, the Treasurer, the Prime Minister, all posted 6 weeks ago, but no replies!
My story in short: In 2016 I invested all I could borrow against my almost fully paid off house in Sterling First , an Australian company that supposed to provide services for Australian people– I did my due diligence and went through all of the provided documents. Their Information Memorandum stated that company was expanding rapidly, was innovative, with promising future, with a great cause of providing so needed affordable accommodation to retirees, and where ASIC’s name was mentioned on numerous occasions. How wrong I was!! Just 3 years later I am with HUGE mortgage of $520,000! Paying currently $24,000/year just an interest on this money. I was encouraged to borrow against my equity with a promise of good returns and an option of withdrawing my funds at any time.
Sterling First group of companies collapsed in June without any warning! ALL MONEY GONE and no funds left. And this group of companies was registered with ASIC, and what I found out recently, under ASIC’s investigations since before I invested. If I knew that directors had a bad history and were known to ASIC, that investigations were being conducted, I would still have my hard-earned money today.
I am 58, single mother of 2, who came to Australia in early 80’s escaping communism with hopes of building my life here and for a better life. 3 years ago, I decided to invest in Australian company for the first time. Being partially pressed by circumstances as I lost my job, I was looking for an opportunity of sound investment that paid dividends until I am secure in my new work. I came across Sterling First. My intention was to substantially reduce my investment in 1-2 years once I had a job.
Now I got a sad, devastating ‘lesson’ in capitalism of the 1st world country – don’t trust anyone, not even the Government that has created bodies and regulations for your protection, anyone can rob you any time and face no penalties, don’t invest.
ASIC a WATCHDOG. It is a wrong name I think and insulting to dogs, as dogs are loyal to their owners who feed them. We pay taxes to finance ASIC but no protection from criminals. ASIC just sits and watches how we bleed to death and then moves onto another investigation. Just last year their budget was increased by over $400 million and they get performance bonuses of approx. $9 million /year. I don’t think it is was deserved.
The heartbreaking fact is that all this fiasco was 100% avoidable if ASIC has done its job properly, and issued a public warning. A simple warning. Most people joined between 2016-2018, while investigations started much earlier.
The directors should be thoroughly screened and they should stand a trial. Crime is a crime, whether white-collar or not. Every time I research any of the papers I was issued by SF or SIT (only few papers, as they were rarely sent with a new bunch of excuses e.g why we cannot sell shares, and new lies about listing on ASX!), I discover fraud, misleading information, deceit and more lies.
Simple example:
1. Quote from Information Memorandum (IM) 2017:
“The Company believes its key strengths include:
• Exposure to secular growth in older Australians’ demand for affordable housing
• Innovative and proven solution to retirement living within the wider community
• Recurring and reliable cash flow from property and funds management operations
• Scalable throughout Australia and potentially internationally
• Insulated from cyclical economic and equity market movements
• Alignment of shareholders and directors’ interests. Executive Management and Directors own 56% of issued share capital
• Dedicated and experienced team with demonstrated sector performance”
And only 2 years later, quote from Liquidators report:
“The Directors have provided us with the following reasons for its failure:
– severe decline in the value of residential properties held of more than 25% and the restricted ability to sell those properties;
– rent income suffered a 20% decline across the portfolio;
– cost of senior debt and the debt to the Development Trust became an unsustainable cash flow burden on the business;
– closure of the SNL business resulted in a reduction in revenue to the Sterling First Group;
– the inability to launch a new rental trust to replace the SIT added further cash flow issue for the Group and RMA”
Anyone would see that one is a total lie. Which one do you think?
Knowing that Sterling First bunch of criminals being investigated, and have faulted before, ASIC allowed that more people were lured in until late 2018! Where is “care of duty” of the Government’s body?
I was urged by Mark McKeown to redeem my cash invested in Co-development units ($59,400) for worthless shares that he has valued himself of $0.20/share as late as 31 May 2019 while SF was already in administration, but I only found out a week ago that this company was not even part of SF group anymore ! Mysteriously it changed hands somewhere on the way and to anybody’s knowledge. And this company was liquidated back in January 2019!!. To this day I have no idea who was his director, or whether he was the director. The condition he proposed for this cash/shares exchange was that we/I release all of his responsibility forever! No other communication. This is a crime and the worst arrogance I came across ever in my life.
I feel not just being robbed of over $1/2mln, that I will have to be paying back for the rest of my life, but also deeply humiliated, pushed around, mislead, lied to, deceived and preyed on, with no rights whatsoever, slapped across face. If I was an object that can be moved around and finally disposed.
I could no withdraw any money for the last 2 years, and dividends were not paid since 2017, all with the excuse that audits are being conducted in preparation of ASX listing!! And ASIC knew.
Right now, at 58, I still have a few years of work life, but then my super of $100,000 can only pay back a fifth of my loan and I’ll have to apply for a Government pension. I had to cut off of my private health insurance. And I can go on with a list of horrible consequences that this disaster has created for me and for few hundred others.
I have lodged a complained with ASIC only days after I found out about administration and I waited 3 full weeks just to be told to go back to liquidators for further clarifications.
I wake up every day (if I can sleep) and still can’t believe this is happening to me in this country.
The totally devastating part is that over 100 retired couples have lost all savings and homes. Can you image yourself in this situation when you are 80, worked hard all your life, saved all those years and someone just takes it all, with a permission of Government? Wouldn’t you call it the highest caliber crime? And because there is no blood, it goes with “sorry – no funds left. You can put your loss against your capital gain’. But there is no capital gain to claim against, and there won’t be, as there is nothing else left to sell and no time to build from 0.
And there are other consequences that can’t be measured in $, such as stress that highly impacts mental and physical health, family problems, marriage break-downs and suicide, just to name a few. There are people with terminal illness that stress of this magnitude will surely negatively affect.
This white-collar crime is not to be brushed off easily.
It seems to me that ASIC doesn’t conduct any investigations until collapse or disaster happens, and is not informing consumers of any findings contrary to its statutory objectives and functions:
ASIC's statutory objectives and functions
3.4 ASIC has functions under the Australian Securities and Investments Commission Act 2001 (ASIC Act), the Corporations Act and other legislation.[5] The ASIC Act requires that, in performing its functions and exercising its powers, ASIC must strive to:
- maintain, facilitate and improve the performance of the financial system and the entities within that system in the interests of commercial certainty, reducing business costs, and the efficiency and development of the economy;
- promote the confident and informed participation of investors and consumers in the financial system;
- administer the laws that confer functions and powers on it effectively and with a minimum of procedural requirements;
- receive, process and store, efficiently and quickly, the information given to ASIC under the laws that confer functions and powers on it;
- ensure that information is available as soon as practicable for access by the public; and
- take whatever action it can take, and is necessary, in order to enforce and give effect to the laws of the Commonwealth that confer functions and powers on it.[6]
ASIC failed on all the above.
And as I was told by Liquidators KPMG director, ASIC will be funding KPMG to conduct the investigation. ASIC is not even capable of conducting their own! So, our tax money is just transferred, first to ASIC taking their share for ticking boxes and then it goes to the liquidators! At the end another tick, and here goes another collapse. More collapses, more money being shared, more funding… Very good set up for revenue. The only sad part is that all it happens at the consumers expense who pay twice – first taxes, then all their money is lost. The perpetrators get away with liquidation, their assets protected as all is done with intention to deceit, and they set up new ventures a few years down the track, as it was with Sterling First. ASIC knew all way along! And didn’t bother to do anything!
ASIC seem to be getting good money for just ticking boxes and NO RESPONSIBILITY, NO DUTY OF CARE what so ever…
I plea for the compensation of $28.6mln to be paid to all people as a matter of highest urgency.
We need our lives and our trust in the government back straight away. There are people terminally ill with only few months to live.
We ask for Royal Commission to into ASIC.
I await you reply.
But please make it meaningful, not another box ticking and another general excuse.
Yours faithfully,
K P
Not proud Australian right now!!