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BFCSA: Angry Letters from Victims of Lazy ASIC re Sterling Collapse # 49

Posted by on in ROYAL COMMISSION INTO ASIC NEGLIGENCE
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Mr James Shipton,

Chair,

Australian Securities and Investments Commission

 

 

Dear Mr. Shipton,

Sterling New Life

I am writing to supplement the submissions appealing to ASIC for compensatory redress for being defrauded in the now collapsed Sterling New Life (SNL).

The pertinent issues in this appeal are based on a raft of misrepresentations by parent company Sterling First (https://sterlingfirst.com.au/) concerning the legal and financial status of SNL and its Tenancy Contract. They also rely on ASIC acting in its consumer protection role.

The complainants were given to believe that the funds they contributed were secured. In good faith they paid in advance the rent for 40 years of tenancy in exchange for the company’s Lease for Life. But the Sterling Group provided no warranty on the product they were selling to these senior couples in the retirement phase of life.

Furthermore, purchasers were not informed that SNL was one of eleven companies under the Sterling First umbrella, nor that their ingoing funds, which constituted the major part of most couples’ life savings, were distributed untraceably through the web of overlapping and interdependent Sterling First Group entities, many of which were trading with ongoing losses.

In addition, unsecured contributors were not informed that Sterling First Group used new capital inflows to pay a significant fraction of its interest bill. Neither did Sterling disclose the complex ownership structure within which the rental properties were held. And they were not told that the SNL they were buying into was the subject of an ASIC investigation for which Notices had been issued under the ASIC ACT; nor were they informed that the solvency of the whole Sterling Group was precarious.

This information asymmetry suggests that the conditions for caveat emptor are abrogated, hence the appeal has a legal as well as a moral basis.

Mr. Shipton, we ask you to use ASIC’s providential powers to bring the dispute between these defrauded persons and the Sterling First Group to a just and honourable settlement.

 

Yours sincerely,

 

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Guest Monday, 16 September 2019