A company spruiking a “land banking” scheme in Maiden Gully has gone into liquidation, potentially costing investors millions of dollars.
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A provisional report, prepared by Deloitte prior to liquidation in March, reveals investors will likely only see a small fraction of the $3 million sunk into the Bendigo Vineyard Estate Pty Ltd project.
Under the scheme, investors bought the right to “bank” land in a proposed development, but liquidators say it was unlikely to have ever come to fruition, and appears to have allowed Bendigo Vineyard and related companies to pocket the money.
“It appears that Bendigo Vineyard raised funds from investors for a development that was unlikely to gain approval in the next 15 years and for which there would be doubts as to the likelihood of approval being granted in the next 20 years, and then paid commissions and/or loaned these funds to related entities,” the report reads.
“The [lot reservation agreement] appears to have essentially provided Bendigo Vineyard with the ability to raise funds by way of lot reservation fees, potentially do nothing for a period of 25 years and have no obligation to refund any remaining amounts to investors who did not successfully make a claim for a refund within the requisite 45 day period.”
City of Greater Bendigo strategy manager Trevor Budge told liquidators Bendigo Vineyard had never made a formal request to have the land re-zoned as residential since it began advertising the 562 lot housing development on its website in July 2014.
Mr Budge said he saw “no conceivable reason why the land would need to be rezoned for residential development in the next 10 to 15 years”.
A total of eight property development companies directed by brothers Dennis and Jamie McIntyre, including Bendigo Vineyard, have now been placed into liquidation.
Of the $3.05 million Bendigo Vineyard raised from investors in the St Andrews Road property, Deloitte found $1.9 million was transferred to Property Tuition Pty Ltd, also controlled by Jamie McIntyre, allegedly in breach of both men’s duties under the Corporations Act, raising the possibility of criminal charges.
“We consider that by authorising payments to be made from the Bendigo Vineyard account to [Property Tuition], the directors failed to act in good faith and in the best interests of Bendigo Vineyard,” the report reads.
“These transfers were not in the best interest of Bendigo Vineyard and resulted in the company having insufficient cash to meet ongoing expenses including loan repayments and general operating expenses.
The report found the payments were of significant benefit to Property Tuition, under circumstances where it was “unable to repay any amounts received” and were of “no benefit to Bendigo Vineyard”.
The liquidators also noted some of the lot reservation agreements made between Bendigo Vineyard and its investors had since gone missing.
“Following our appointment, we requested a copy of all LRAs signed by investors to reserve a lot in the Bendigo property from Dennis McIntyre. Dennis subsequently provided our office with a USB of all the documentation in his possession which did not include any signed LRAs for the Bendigo Scheme,” the report reads.
“Dennis McIntyre has advised that he does not have any further documentation or LRAs. The LRAs we have in our possession are those contained in the books and records collected by our office and those provided by various investors. We note that we have copies of executed LRAs in relation to 84 of the 120 lots sold.
“Further investigations would need to be conducted in relation to the whereabouts of all LRAs.”
The Australian Securities and Investment Commission is now seeking to have both men disqualified from managing corporations in the Federal Court, with a directions hearing scheduled for April 8.
ASIC alleges that five land banking schemes, including Bendigo Vineyard, are unregistered managed investment schemes and/or financial products and that Jamie and Dennis McIntyre have been unlawfully carrying on an unlicensed financial services business.
Jamie McIntyre was contacted for comment while Dennis McIntyre could not be reached.
CLARIFICATION: This article is about Jamie McIntyre and his associates who use the term 21st Century group to describe their various property activities. However the Bendigo Advertiser accepts that Mr McIntyre is in no way associated with 21st Century Group Pty Ltd (Australian Company Number 108 150 545), a Sydney-based property development company that was registered in 2004. Full details about 21st Century Group Pty Ltd can be accessed at www.21stcenturygroup.com.au