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BFCSA: Angry Letters from Victims of Lazy ASIC re Sterling Collapse # 21

Posted by on in ROYAL COMMISSION INTO ASIC NEGLIGENCE
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23 June 2019

 

Mr James Shipton

Chairman of Australian Securities and Investments Commission

120 Collins Street

MELBOURNE  VIC  3000

 

Dear Mr Shipton

I am writing to you on behalf of my father, who was duped into the scam investment of the now defunct Sterling Life Group by way of signing up to a 40-year rental lease (which I found out recently is a sub-lease) on the property he currently resides.  My father is 83 years of age and lost his wife, my step-mother, just a few months back.  Therefore, not only is he grieving over the loss of his wife of 30+ years, but on top of that, has now been placed in a massively stressful financial situation which is taking its toll on his health, having total uncertainty, financially and residentially, as to his future.

I will expect that you, as Head of ASIC, will read this letter in its entirety and will reply with an explanation of how you are going to resolve and compensate my father for his losses in full, being that, from what I have now discovered, ASIC were well aware of the improprieties of Sterling Life and its activities, and were well aware of the cast of characters who were directors of this group, as  well as being aware of their colourful past history (Armstrong Jones, Wheeler Grace and Perrucci, etc. from way back in the 1980’s and who then again re-surfaced around the early 2000’s), since as early as 2015!  If ASIC had taken bothered to take action back then, then those who have been affected by this group of companies would not be in the situations that they now find themselves in.  THIS IS TOTAL NEGLIGENCE ON THE PART OF ASIC! 

Another fact I have since been made aware of is that all of the companies that came under the Sterling Life structure were REGISTERED WITH ASIC!!!  Where is the due diligence of ASIC in allowing these companies to be registered under new structures when the characters involved were known to have been involved in massive collapses in the past which resulted in the loss of millions of dollars?

It has now also been brought to my attention that the auditors also raised concerns about this company back in 2017.  I am at a total loss as to why this company was not shut down when these concerns were first raised!  So, now there are well over 100 other families, not only tenants (retirees) who find themselves swindled out of their life-savings and a secure place to live, but also property owners who are now having the stress of not receiving income from their investments and still having to find a way of making mortgage repayments on these properties.

There are now many very stressed people and this situation could have been completely avoided if ASIC had been taking action on what it should have been focussed on when these concerns were first raised.   It should be now up to ASIC to compensate all of these people who have been swindled for the full amounts of money each one has invested and property owners should be compensated for the full loss of earnings on their properties, as a result of ASIC’s total incompetency in this matter!

I will give you details of how my father and step-mother were duped into this.

They had a supposed ‘friend’, who I choose not to name at this point in time, who was receiving commissions for selling these leases out.  Interestingly, he did not enter into one of these leases himself.  My step-mother had not been in good health for a long time and my father was around 80 at the time they started to think about down-sizing.  This friend had obviously been promoting these 40-year leases so he could earn himself some commission from the sales. 

Unfortunately, my parents have never spoken to myself or my two brothers about any of their financial decisions or circumstances in the past, and therefore we were oblivious to all of this at the time and only became aware of their involvement after they had signed up and handed over their $212,500 to Sterling Life.   As soon as they had advised me they had signed up for a 40-year lease, alarm bells started ringing in my head and questioned them as to why they would sign up for a 40‑year lease when they are definitely not going to be around for that long, plus other questions as to what happens if you need higher care, no longer able to look after yourselves, do you get your money back if you need to move due to requirement of higher care, etc, etc, etc?  Unfortunately, as they were being sold something from someone whom they considered a ‘friend’, although he was earning a commission, then I think they tended to be too trusting and didn’t ask the questions that needed to be asked.

So, back in 2017, my father and step-mother had started thinking about down-sizing, and this friend of theirs put them up to this Sterling Life scheme with a 40-year lease.  There is a total lack of paperwork, so I am not exactly sure as to the timing when all the transactions occurred.  They had their name down for one particular property however this didn’t eventuate as they hadn’t sold their house.  Some months later, they did eventually sell their house and had their names down for the property my father currently resides in. 

Now that my step-mother has passed away, I have taken it upon myself to help my father out in this situation. 

I am astounded at the following:

1.     That there is no actual signed lease agreement in my father’s possession with the details of this lease.  There is a poorly photocopied Registration Form which is the only signed document I can find.

 

2.     That there is no proper receipt from when he first handed over his money to this company, although there is a letter dated in January 2018 stating that the amount of $212,500 had been invested into SilverLink.

 

3.     My father has never received any statements from the company detailing his investment, showing the deductions of the rental amount and administration fees.  I would have thought that a statement is a mandatory requirement of a financial business who has taken funds for investment and that the investor would be entitled to ongoing statements detailing the deductions of the rental amount, any administration fees, as well as the residual balance of this investment after these costs have been deducted.

 

4.     How is one supposed to complete taxation returns, or apply for other financial assistance, without evidence of where their money has been invested and a current summary of how that investment stands?  Today, my father and I went into Centrelink to apply for rental assistance, for which I understood, he would qualify for.  They asked for:

a.     A lease agreement – no documentation!

b.    A statement showing his current asset balance with SilverLink – no documentation!

Due to lack of documentation, they said they may be able to draw something up for him but it is unlikely that he would qualify for rental assistance.  The lady at Centrelink has said she will investigate his situation, though, to her credit. 

HE DOES NOT OWN THIS PROPERTY AND HAS HANDED OVER APPROXIMATELY 80% OF HIS SAVINGS!

 

 There are now many families severely affected and impacted by this Sterling Life situation and whose lives have been put on hold as there is no certainty as to how their future is going to look.  A significant number of these people are elderly and have serious health issues, and the last thing they need at this point in their lives is the uncertainty that has been created through the total lack of competency and laziness by ASIC to ensure that these concerns were out there in the public arena.  From my understanding, the whole purpose of ASIC is to ensure that companies are legitimately operating within the law and it is now very clear that ASIC were well aware of the red flags against Sterling Life well before many of these people had signed up.

I look forward to your response and advice about how the compensation will be made.  I expect that you will be attending to this matter as an URGENT and CRITICAL priority.

Yours sincerely

 

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