Fairfax has allegedly been lying and deceiving its readers to try and character assassinate CEO of 21st Century Group, Jamie McIntyre.
McIntyre has exposed both ASIC and Fairfax’s collusion to cause deliberate losses to land banking investors, which has only led to increased attacks on his reputation by both ASIC and Fairfax.
Below is article written by Fairfax, which shows just how deceitful and appalling their journalism is, especially if you consider the facts compared to the Fairfax version. We have sought clarification and responses of the facts from 21st Century to highlight Fairfax’s relentless deceptions.
One must wonder why Fairfax hates McIntyre so much?
Is it because he had the audacity to launch a political party that threatens Fairfax’s extreme left wing friends or is it because he launched a national newspaper- ‘Australian National Review’ that doesn’t hesitate to finally expose the lies published by the Australian mainstream media, especially Fairfax.
Fairfax claims:
“They’d sell ice to an Eskimo”, says David Johnson* as he ponders the whereabouts of almost $180,000 he tipped into land banking schemes linked to notorious get-rich spruikers Jamie McIntyre and Henry Kaye.
21st Century: However, Fairfax goes on to admit there is no such David Johnson! It’s a fictitious name, akin to the claims that he has lost money.
Just like other clients of 21st Century projects, he has not lost a single cent, nor is Kaye a partner or involved in 21st Century land projects (as proven via public search on shareholding of 21st Century Projects).
Not only would the client hold his options to this day, but also the clients are updated continually.
Fairfax has only rushed this article in response to the ANR article entitled- ‘Investors furious about ASIC interfering in their land banking investment and threaten class action’.
http://www.australiannationalreview.com/investors-furious-asic-intefering-property-investment/
Fairfax go on to try and paint David Johnson, a fictitious client as a victim, even though he has lost no money and holds options over two land projects- one being Shepparton, which has increased in value by over 120% in two years and Bendigo Hermitage, which has increased by as much as 500%. Bendigo Council has also residentially rezoned the latter and the project is proceeding as planned.
Fairfax: For the young Hunter Valley electrician, it all started with a book by the high-flying McIntyre. The flamboyant wealth educator’s prose convinced Johnson that property and equity wealth could be “demystified”.
If I had left everything alone and done nothing, we’d be better off.
David Johnson
In 2010, after decade of struggle, Johnson and his wife, Helen, were close to paying off their home loan, and were looking to build an investment portfolio.
21st Century: Fairfax posts a photo of Henry Kaye, Jamie McIntyre and Konrad Bobilak at a fancy dress party. Nevertheless, they fail to note this photo is from a themed function in 2006, approximately nine years ago. McIntyre is someone who gets his photo taken with thousands of people every year. Fairfax only received the photo from an individual many years ago trying to extort money from McIntyre by implying he was somehow closely associated with Kaye, which simply isn’t true.
Fairfax says:
On advice from McIntyre-recommended accountant and lawyers, the young couple combined their superannuation savings, redrew their mortgage, and set up a self-managed super fund.
21st Century: All clients were able to get independent legal advice.
Fairfax: They used the cash to buy membership in a club known as 21st Century Property Direct and made their first payment on options of farmland earmarked for luxury residential developments outside Shepparton and Bendigo. Five years later – the couple now have a three-year-old son and are expecting a second child – not a house has been built, not a sod turned. The Shepparton project, promoted by Sunshine Coast-based McIntyre, is a trainwreck.
21st Century: Fairfax lies here again. The idea of land banking is for land to be banked for 10-15-20 years and over time it rises substantially in value, even if not rezoned ever as residential.
Shepparton has been offered as a 10-15 year project, and that is still the estimated guideline. In fact the council is just approving a rezoning nearby in an area, which six months ago they claimed would never be rezoned for 10 years. The council has asked the owners of the Shepparton development if they object to the rezoning, as its nearby neighbour is applying for rezoning.
The Bendigo project, which Fairfax claims is in administration, is actually a well-rehearsed lie by Fairfax.
The Bendigo project known as Hermitage has not collapsed. They are referring to a shell company that doesn’t own the project. It is called ‘Midland Highway’, where sadly the original elderly landowner died last year. In order to tidy up his affairs his son put it into administration.
Fairfax know full well that all option holders were assigned several years ago to Bilkura Investments to protect their option rights in the Hermitage project (they even admit it at the bottom of some of their articles), which not only has been approved by the council but is also now a much larger project than ever before. They can visit the site and see the area nearby, which was only a farmland few years ago and is now being turned into houses.
Fairfax trying to state that this project has gone under is deliberately false. It is in response to them being caught out and embarrassed by McIntyre offering a $10,000 reward to anyone, including Fairfax journalists, if this so called lost land that’s gone under can be found, especially considering it doesn’t exist.
Fairfax then states:
Last week the news got worse for Johnson, with the company behind the Bendigo scheme in administration and the Australian corporate watchdog announcing it would liquidate five more of McIntyre’s projects.
“If I had left everything alone and done nothing, we’d be better off,” says the young sparkie.
“We’d at least own our own house outright.”
21st Century: He actually owns options over land that has increased in value substantially and one of the projects has been residentially rezoned by the council already. Therefore, zero losses have been incurred.
An option fee is a fee for service. You pay it for the right but not the obligation to acquire land in the future- ideally at the price of land that after 5-10-15 years has risen well above your purchase price. 21st Century Property was only a marketer for Hermitage and Shepparton, so all option fees were paid to the developers’ trust account and never to the 21st Century Group. What the developers did with these funds is not something 21st Century is privy to.
Fairfax: The Australian Securities and Investment Commission’s (ASIC) concerns about such land banking schemes are not limited to McIntyre’s operation. Nor is it alone in its concerns. A Fairfax Media investigation of the land banking schemes has also triggered a Senate inquiry, which is due to begin hearings later this year.
21st Century: McIntyre welcomes the so-called Senate enquiry, as the land banking concept can actually solve the current housing affordability problem caused largely from restriction of land for new homes.
This concept can not only cap land prices for option holders but it can also release a lot more desperately needed land. Many consider it as the most practical strategy available to once and for all solve Australia’s housing affordability problem.
http://www.australiannationalreview.com/solve-housing-affordability-problem-australia/
http://www.australiannationalreview.com/jamie-mcintyre-welcomes-senate-questioning-land-banking/
http://www.australiannationalreview.com/asic-banks-colluding-stop-property-investors-passing-banks-leverage-property/
Fairfax: Over a period of five years, McIntyre and companies associated with Julia Feldman, the sister of notorious property spruiker Kaye, have sold thousands of “options” on land lots in at least eight land banking schemes in Victoria and Queensland. Conservative estimates suggest more than $100 million has been tipped in.
21st Century: This is another fictitious figure by Fairfax. Yes, investors do like land options, as it’s a way to get into the property market without borrowing money. Moreover, it costs less and does not involve the headache of having tenants.
It’s a well known legitimate and legal strategy. Would Fairfax prefer to tip the money instead into risky share market investments? Perhaps the Fairfax shares of a dying media company are so desperate for readers that it now invents stories to try and sell newspapers.
Julia Feldman worked for 21st Century several years ago and assisted in the marketing of only two projects- Shepparton, and Hermitage in Bendigo (formerly known as Acacia Banks). She left the employ of 21st Century sometime ago and has no ongoing relationship or involvement with the Group whatsoever. It is believed she either started Market First or started working for them in the sale of competing land projects that have no association with 21st Century land projects.
21st Century Land projects have only sold $5.5 million in options and all information regarding this was provided voluntarily to the ASIC by McIntyre months ago. ASIC has also done an audit of these monies.
According to numerous legal advisors, the sale of land options is perfectly legal and the strategy is legitimate. The fact that ASIC is going after McIntyre and not other companies in the industry is suspicious considering he is the only one to voluntarily provide full details months ago to the corporate regulator and fully cooperate from day one.
He feels he has nothing to hide; nevertheless the so-called investigation into land banking by ASIC has not included the interrogation of other individuals or companies associated with land banking. Only McIntyre has been targeted, who voluntary approached ASIC and happily provided full particulars and even asked for their help with the Shepparton project to find out what the developers did with the $4.7 million in options money, which McIntyre covered for his clients when he acquired it from liquidators to protect their investment.
Fairfax: Now everyone from Johnson to ASIC and the Senate committee are asking the same question. Where is the money? The deluxe developments proposed on the outskirts of Shepparton, Bendigo, Ballarat, Melbourne’s west and south-east, and Townsville, have been spruiked by fast-talking salesmen at seminars organised by 21st Century and Feldman-linked company Market First.
21st Century: Not really. A lot of investors are questioning why ASIC and Fairfax is misleading the public stating there have been losses, when not a single option holder has lost any money. McIntyre has been the only victim to date by covering $4.7 million in option liabilities in Shepparton plus the 21st Century Group said its involvement in marketing both Shepparton and Hermitage in Bendigo has been a loss to the Group and a major headache. This is largely because of the inadvertent link to other alleged parties that wasn’t disclosed upfront by the developers, which has affected its brand .
Why is there a concerted campaign to target an industry and McIntyre particularly, who has fully co operated with the ASIC from day one and has offered sometime ago to license the projects if it’s deemed necessary?
Even though copious legal advice suggests property options is not a financial product that needs to be licensed, ASIC refuses to accept that. Ironically, even ASIC admits that in fact, it may not be a financial product.
That’s why it is evident that the smear campaign is to try and destroy McIntyre’s business by attempting to tie them to a past property spruiker and invent losses, which investors haven’t incurred. Also any missing monies from Botancia in Shepparton or Hermitage Bendigo have nothing to do with 21st Century, as all proceeds were paid to the developers’ trust accounts. ASIC know from their audit that these monies were never paid to 21st Century and even clients know they were paid to solicitor trust accounts.
Fairfax: The targets are mum-and-dad investors from across Australia lured by the promise of windfall profits once the farmland is developed for housing.
21st Century: Actually savvy investors see the merit in the strategy and queue up for the chance to be allocated such options, as its a legitimate strategy that has been around for decades.
Fairfax: Glossy brochures and videos feature luxury golf or vineyard estates, ‘unique communities’ and ‘architectural masterpieces’ supposedly designed by big-name architects, such as Fender Katsalidis, who have since distanced themselves. Even renowned legal firm Slater and Gordon had a role at one stage advising investors in the elaborately named Veneziane and Foscari schemes proposed for Melbourne’s west.
The seminars, conferences, and cocktail gatherings have featured a who’s who of international get-rich luminaries, including the prolific Rowan Burn from company Market First, and headline-grabbing speakers Virgin founder Richard Branson, Arnold Schwarzenegger and US spruiker John Dimattina.
Fairfax Media does not suggest that Branson, Schwarzenegger or Dimattina played any improper role in the marketing of the land banking schemes. In the wings were 21st Century and Market First’s recommended accountants and lawyers with option contracts, legal disclaimers and self-managed super fund structures. All Johnson, and his fellow investors, had to do was sign the paperwork. And it has cost them.
21st Century: Once again Fairfax imply this fictitious client David Johnson has lost money, which isn’t the case. Also, why has Fairfax changed his name? Is it because if he was to be contacted and lies by Fairfax clarified, he should have no concerns?
He is actually a victim of Fairfax’s lies. If Fairfax and the ASIC get their way, they will deliberately cause losses to him and other investors, a fact that McIntyre has exposed repeatedly.
Market First have no association to 21st Century, nor does Global One. Julia Feldman worked in a sales management role in one of 21st Century’s company many years ago. She hasn’t been associated with the company for sometime now. Market First was not involved in the Branson event (2011) or Schwarzenegger event (2013). Nor did the events have anything to do with land banking.
Fairfax: The options, costing up to $40,000 each, give buyers the ability to buy a block of land up to 15 years in the future. But they are not legally linked to a land title, and they limit the buyers’ rights, specifically precluding them placing caveats on any property.
21st Century: False.
They are legally linked to a title. In fact in every 21st Century Project they get a default charge over the land asset itself (far more security than a caveat) and a 20 year refund clause, which can easily be covered from the developments in the future, if the worst case scenario of no rezoning happens.
Land rises in value, regardless of whether it is rezoned. Moreover most projects, if not already, are within the Urban Growth Zone and either border residential locations or are close by. They all have precedents of farm land nearby. Even though Councils may say their current guidelines don’t include rezoning these areas, yet they have rezoned down farms, as that’s why these sites were selected due to this precedence sent by Council.
Even if rezoned to rural living, it would cause major price increases of land, let alone residential rezoning. However even if no rezoning ever occurs, the expected land price increase at a fraction of its historical past would see ample funds to refund all option holders. Conservative modelling suggests 200% more than required to refund all option holders in the worst case scenario, so the downside for options holders is limited due to this protection clause.
Can investors get a 20-year refund clause secured by real estate if they were to invest in Fairfax shares or the stock market in general and wanted their investment fully protected?
Not likely, especially since Fairfax despite spending hundreds of millions of its shareholders money on a property project (printing plant) near Melbourne Airport could only sell it for $15 million.
Therefore, it’s clear that Fairfax is the only one that actually has a track record of taking hundreds of millions from the public and losing it on failed property developments. In fact Fairfax has lost billions in shareholder money, but that’s ok as they are a media company and can invent the truth.
Fairfax claim that few of the investors questioned by Fairfax Media fully understood the risks associated with their investment.
How would Fairfax know that considering it’s clear they don’t understand the lack of risks for the option holders?
The only risks option holders face is by Fairfax and the ASIC, which deliberately plans to try and destroy the projects with ASIC trying to appoint liquidators to viable long term projects to ruin option holders and frame McIntyre, who they clearly have an obsession with.
Fairfax: Last week, the regulator launched court action to force McIntyre and his brother Dennis to hand in their passports and it is seeking further orders to tip five of their projects into administration.
21st Century: Yet the courts ruled it wasn’t necessary to hand in their passports and it was nothing but a publicity stunt typically used by ASIC to try and tarnish its targets.
At worst, McIntyre’s company has inadvertently breached financial product laws, however all companies can do is get legal advice to ensure they are 100% legit and compliant. What more can companies do than seek legal advice to ensure they are compliant? ASIC has even admitted in Senate hearings that land options may not be a breach.
ASIC is yet to prove that property options are a financial product and that’s why they are trying to appoint liquidators to sabotage the projects based on false allegations made by Fairfax to cause deliberate losses before the matter even gets to trial. Therefore, they hope to win by default.
In a written statement ASIC describes the projects as unregistered managed investment schemes, and alleges that 21st Century Group of companies and Mr McIntyre have been ‘unlawfully carrying on a unlicensed financial services business’.
Fairfax: McIntyre needs to be restrained from promoting the schemes, ASIC says.
21st Century: False again. McIntyre’s land division company voluntary ceased the sale of land options some months ago and has offered to make them licensed managed investment schemes even if they don’t need to be.
Fairfax: On Friday Senator John Williams grilled ASIC about what it was doing to address the problem.
21st Century: More nonsense.
Senator John Williams is one of the biggest critics of ASIC’s gross incompetence and just like McIntyre, he has been calling for a Royal Commission’s investigation into the ASIC.
Fairfax: The mainstream development industry has also weighed in with concerns, warning investors about buying options in future housing estates that may never be built.
Former Urban Development Institute of Australia chief executive Tony De Domenico has described such options as “high-risk investment products, not land sales”.
21st Century: Unless of course they come with 100% money back guarantee secured by a default charge of the land asset itself. Why would a developer provide such security unless it was interested in protecting its option holders?
What the less intelligent at Fairfax don’t get is, why would developers not develop the projects or why wouldn’t they sell to a developer for a profit when ultimately the land acquired for $1-$2 million becomes worth hundreds of millions after being developed and fully sold?
Why would a developer screw over option holders, which effectively are pre sales worth tens of millions in future and sales? The whole goal of selling options is to lock in early pre sales at a wholesale rate effectively. Fairfax clearly doesn’t have the property knowledge to understand this nor do they understand that options are a fee for service and not an actual investment.
This is clearly behind Fairfax’s inability to understand land banking, especially considering Fairfax property projects have lost innocent mum and dad investors hundreds of millions already, but there was no scandal or ASIC investigation surrounding those losses by Fairfax
Fairfax: Slater and Gordon, too, have been caught in the fallout. After being drawn into the schemes as an adviser to clients on two projects in Melbourne’s west, the company withdrew.
This has nothing to do with McIntyre’s 21st Century Property projects.
Fairfax: Last year it wrote to clients warning they may have been misled, and paid too much for their lots. Notably, it also withdrew because the lawyers acting the developers would not disclose the identity of all of the individuals behind the projects.
The catalyst for the latest round of controversy is Midland HWY Pty Ltd, the company behind the 700-lot project north of Bendigo called Hermitage.
Mum-and-dad investors like Johnson have tipped more than $25 million into the estate on the lure of Fender Katsalidis-designed homes adjoining a lush golf course.
Midland HWY is now in the hands of administrators PPB Advisory. The company’s previous administrators, Hall Chadwick’s Richard Albarran and David Ross, were forced out by recent ASIC legal action. But prior to their departure they that had noted that large sums of investor money placed in legal trust accounts had quickly flowed out.
21st Century: As shown earlier, all option holders were assigned to Bilkura Investments and they hold their options in the project they acquired options with. However, the project is now much larger and Council has now residentially rezoned the land increasing its value massively.
Therefore, not a single option holder has lost any money. They retain their options and Midland Highway is irrelevant to them. ASIC is welcome to investigate what Midland may have done with the options money but it isn’t a company 21st Century has ever owned or controlled nor has any knowledge of what they do with the option monies. Its only concern is to ensure the project proceeds, so its clients benefit. However, as it has been residentially rezoned and permitted, it is on track.
David Johnson has been a victim of Fairfax, which has been misleading and harassing them and others thus causing unnecessary concern. However, other than that, their investment is on track and better than expected.
Fairfax: At least $23 million was paid for unspecified services to Project Management Australia, a company controlled by Michael Grochowski, himself a prominent player in many of the land banking ventures. Grochowski and Project Management Australia have played a frontline role, dealing with councils, authorities and consultants in projects in Melbourne’s west, Ballarat and Bendigo.
Grochowski refused to be interviewed for this story.
The administrators note that Hermitage had won development approval last year and town plans have been submitted. But the challenge of unravelling what has happened to creditors’ money at Midland HWY will delay the project for at least a year.
Its collapse mirrors the failure of another 21st Century project in Shepparton called Moira Park Green City, later known as Botanica.
21st Century: Another false statement, as it was never a 21st Century Project.
21st Century Group acquired the Shepparton project off liquidators and was the white knight that took over $4.7 million in liabilities of option holders and plans for the project to remain unchanged as a 10-15 year project.
Also option holders aren’t creditors of Midland, as they were assigned to Bilkura the company proceeding with Hermitage Project, which Fairfax admits is residentially rezoned and approved by Council .So why is Fairfax attacking McIntyre so much and trying to imply he has somehow taken $23 million dollars when ASIC know full well that no such thing has happened. In fact, Fairfax is welcome to audit Property Direct Bank details as well. They will clearly see that the options sold for Midland Highway were paid directly to developers’ trust account and never to 21st Century, as 21st Century was nothing more than one company that originally marketed the project for a third party developer.
21st Century has no ongoing association with either developer other than to monitor that the project is progressing for its clients’ interests.
When the 21st Century Board realised it could no longer get the answers regarding the main players in Midland’s ownership and refused to sell any more options in it, as there were unconfirmed rumours of other parties involved in the Sydnicate of investors- 21st Century didn’t want to be associated with them any longer. 21st Century decided to acquire its own projects to remove third party developer risk in case the same thing happened at Shepparton, where 21st Century had to buy the project from administrators and take over $4.7 million in liabilities whilst the previous developers failed to progress the development.
The only victim to date in these matters is McIntyre himself as his 21st Century Group took over $4.7 million in option holders’ liabilities in Shepparton. If Hermitage didn’t proceed, it may have to acquire the project and assume $18 million in option holder liabilities to complete the project. Plus it has not made any profit from marketing fees but rather significant losses. The 21st Century Group has inherited a headache and is suffering extensive brand damage when all it did was take over option liabilities from past developers to protect its clients. To ensure such events can’t happen on its own projects, the company created 100% money back safe guard where option holders get a default charge of the land assets, which are rising and will rise substantially grow over 20 years even if rezoning isn’t successful.
Fairfax know this and it’s public information, but for some strange reason they never mention it. On the other hand they try to mislead the public that somehow one of 21st Century’s project has gone under when Hermitage isn’t a 21st Century Project and nor has it gone under.
The developer of Shepparton was Nejat Mackali, who should be investigated regarding the whereabouts of the original option holders’ monies, the liabilities of which McIntyre took over even though he had no legal obligation to protect everyday investors.
Why hasn’t Fairfax or ASIC investigated Nejat Mackali?
That’s because Fairfax likes to repeat the lies and nonsense Nejat Mackali spruiks, as it serves them for defaming McIntyre.
Many years later it has come out that allegedly Mackelli had a business relationship with Kaye, but Fairfax spun this to make it look like Kaye’s land projects were associated with McIntyre and still push this, as it makes for good defamation of McIntyre.
However, information regarding 21st Century Group’s owners and land projects is public information.
Fairfax: In March, Fairfax Media revealed how Shepparton developer Nejat Mackali worked on the early stages of Moira Park with Kaye, Feldman, McIntyre and 21st Century.
Shepparton appears to have been the prototype for the other options-based land banking schemes across Victoria, and in Townsville.
However, the relationship between Mackali and the 21st Century team collapsed and the project imploded. The Shepparton scheme fell into liquidation.
21st Century: Mackali put the project into liquidation. McIntyre out of good will acquired the site off the liquidators in 2013 and took over $4.7 million in liabilities. He intends to develop the site or resell to developers at a later date. The site has risen in value by over 120% since McIntyre acquired it.
Fairfax: Administrators Jirsch Sutherland told Moira Park creditors $4.7million was invested as options, about $2.4 million is unaccounted for.
21st Century: 21st Century questions why hasn’t ASIC with its powers investigated where this money went?
Fairfax: From the legal row ensued emerged evidence of the involvement of Kaye and Feldman. The documents also reveal Kaye’s early involvement in the Bendigo scheme promoted by 21st Century as Acacia Banks, rebadged as Hermitage.
Belarus-born Kaye first came to prominence in the early 2000s as the head of a get-rich-quick property empire that targeted unsophisticated investors. It collapsed in 2003 owing 3500 investors up to $60 million.
He was later found by the Federal Court to have breached the Trade Practices Act. His five-year ban from managing companies expired this July.
In a surprise move this week, ASIC ramped up its challenge to the schemes seeking orders to get administrators appointed to the rebirthed Shepparton Botanica project, another in Bendigo, a third in Wallan, an estate in Mount Cottrell and one in Townsville. It is an uncharacteristically strident move by a regulator often criticised – especially by Senate committees – for its lack of aggression.
21st Century: It’s a deliberate tactic, as Fairfax and the ASIC were exposed over the fact that there were no losses. Therefore, now they urgently need to create losses to investors to save face.
If ASIC succeeds in its agenda, investors lose 100% of their money, which ASIC know. They are using taxpayers’ money to deliberately try and cause losses to them.
http://www.australiannationalreview.com/asic-attempts-deliberate-losses-land-banking-investors-meant-protect/
Fairfax: The court action could prove disastrous for McIntyre and his associates if ASIC is successful in declaring that land banking schemes are really unregistered managed investment schemes in disguise.
Managed investment schemes require an ASIC-issued financial services licence and a level of transparency not seen in land banking schemes.
The 21st Century Group offered to license its projects sometime ago but ASIC declined allowing this
The group has held several AFSL licenses in the past and recently acquired one for the purposes of licensing these projects but ASIC is opposing such moves to make them licensed.
A spokesperson for the 21st Century Group said “Also several property groups have approached 21st Century offering to acquire the land projects and convert them to Managed Investment Schemes. However we don’t believe this is about licensing its clearly it’s about other agendas by the ASIC and people should be aware of that “
Of mounting concern to those who scrutinise land banking schemes is the investors’ use of self-managed super funds to buy “options.”
The Abbott government’s sweeping Murray inquiry into the financial system recommended that self-managed super funds be banned from borrowing to buy assets such as property and shares.
Such funds are covered by financial products legislation and regulated by ASIC whereas property is one of the few asset classes that is not.
In the hothouse of rapidly rising property prices in Australia’s capital cities, regulators are particularly concerned about people moving funds from existing super accounts to self managed funds to finance property purchases.
Philip LaGreca, from SMSF fund administrator Multiport, points to some “very unusual behaviour in this space”.
At last count, Australia had about 550,000 self-managed super funds with up to $15 billion invested in property. How much has gone into McIntyre-style schemes is not clear.
“Nobody really knows,” LaGreca says. “Is it a runaway problem? Probably not. Do we want to stop it turning into that? Absolutely.”
He says McIntyre’s 21st Century “cleverly” sells itself as an “educational” service, thereby skirting rules requiring a licence for those who give financial advice.
21st Century: A 21st Century spokesperson said, “There is some concerns regarding super being used to leverage into property. However with the use of options there is no borrowings and 100% refund is secured by land assets so it’s not an issue that affects land banking.
Is ASIC saying investors should only invest in managed funds in the stock market, perhaps like Storm Financial, which lost $3.5 billion of investor monies due to leverage in the stock market?
The idea that Australians shouldn’t invest super into property is nonsense and pushed by those wanting to keep the rivers of gold flowing on commissions into managed funds in the stock market (mostly sold by the big banks).
I’m not sure everyday Australians should be seeking financial advice or recommendations by left leaning bureaucrats that work for government departments such as the ASIC who can’t understand basic investment philosophy and risk, let alone understand a more complex land banking strategy.
Australians should be allowed to get on with their life and retirement and not have ignorant jealous government bureaucrats dictating them to not invest super into property or sensationalistic journalists who don’t care much for the truth.
Fairfax: ASIC and McIntyre will fight out the claims in the Federal Court in the coming weeks and months. 21st Century says it will defend the matter.
On his 21st Century blog McIntyre confirms the company’s intention to defend the ASIC action. He says ASIC’s allegations are “deliberately misleading “in and part of a “typical tall poppy witch-hunt”.
And he calls for a Royal Commission into ASIC.
But even if the regulator wins, its job is only part done.
Similar schemes operating in Melbourne’s outer west and spruiked by a separate but closely related property firm, Market First, have so far avoided ASIC action.
21st Century: Fairfax state Market First is closely related to 21st Century, yet no such relationship exists nor ever has. Moreover, neither do their projects have any relationship to 21st Century. Fairfax knows this, but once again they like to deceive.
Fairfax: Feldman has been a key player in both 21st Century and Market First. Insiders confirm that she plays an identical marketing role in both Market First and 21st Century and has had a role in most of schemes.
21st Century: Feldman was an employee, one of hundreds that have been hired by the 21st Century Group. She left years ago and then started working for another company, most likely Market First. However, Fairfax somehow claims the companies are now linked.
A past 21st century employee also now works for CBA. Does that mean 21st Century and CBA are closely related? Clearly not.
Fairfax: Also central to the operations of both Market First and 21st Century is Greg Klopper, the man behind Global1, and another name linked to Kaye, whose company organises major spruiking events for both 21st Century and Market First based on its massive database.
Greg Klopper has zero relationship to 21st Century nor has set foot ever into a 21st Century office and would technically be a competitor .
A few investors have tried to opt out after signing up in seminars.
In March, Liesl Baxter, an investor in the Foscari project, got her $45,000 investment back after an extraordinary personal campaign. She told Fairfax Media: “I think the game plan is to construct a money-making scheme using the integrity that comes from reputable names within the building and legal industries, to gain the consumer’s trust and confidence so they part with their money. Meanwhile, the developer has no intention to follow through with the project.”
21st Century: Foscari is not a 21st Century Project, so 21st Century is not responsible for other companies in the land banking industry which is a very large industry or within the property market.
Actually only a very small percentage of 21st Century sales of options ever come from seminars.
They come from members who paid to access such deals. Clients have to qualify to even be considered for such sought after investments and all option holders get 100% money back guarantee.
Fairfax: Well-placed insiders have explained how, in fact, the spruikers had most – or as many as possible – of the lots through the marketing seminars and, the one-on-one pressuring that follows them.
The growing list of projects have so far failed to produce a single house, much less the helipads, sky lounges, and waterfront lifestyles depicted in brochures and videos used to promote them.
21st Century: No 21st Century project has offered helipads, so more sensational journalism.
No projects are meant to have houses on them yet. It’s land banking, i.e. banking the land for the future and eventually building houses on them.
Such ignorance by lowly paid Fairfax journalists who no doubt are not active property investors and lack investment expertise and any real investigative skills.
The outlandish claims of ‘lifestyle’ precincts and ‘architectural masterpieces’ in the backblocks of Melbourne’s outer west are now something of a joke among the property and development industry.
21st Century has only one project in Western Melbourne, and no such claims have been made.
The joke is clearly on Fairfax and their false stories, as they are the only company in this matter that have lost hundreds of millions of mum and dad investors’ money in their failed property projects including the one near Tullarmine, not to mention Chullora in Sydney.
Fairfax: Fairfax Media has confirmed from several well-placed sources that at the very time Market First was stepping up pressure on investors to tip money into the Foscari scheme, those behind it were trying to on-sell their own project.
In 2014, real estate agents were confidentially commissioned to sell the entire Foscari site.
A former Market First insider insists this was always, and still is, the plan: sign up naive punters sold on the idea of a lifestyle project designed by fancy architects. Then, with pre-sales in hand, flip the site to Joe Blow builder/ developer to roll out a standard suburban estate.
21st Century: Wasn’t Fairfax stating earlier that it’s an effective scam, as no houses will ever be built?
Now it’s admitting they will be built, but by normal suburban builders.
Fact- 21st Century in its projects has never mentioned who the architects will be, as it’s irrelevant and unnecessary until years down the track.
The concept works whether it’s a suburban basic development or not.
Option holders are making a simple bet, as are the developers
Will land in areas close to residential or bordering residential rise in value over the next 20 years? It’s a pretty simple bet and the answer a resounding yes.
The only threat to such an investment is a dodgy complicit media organisation such as Fairfax making up trumped up allegations and working closely with ASIC to try and deliberately cause investor losses of $5.5 million in 21st Century’s Projects.
This behavior comes despite the fact that 21st Century is the only company in the industry that is cooperating with the ASIC, has offered to license the projects, refund option holders in several of the projects already and convert others to a Managed Investment Scheme.
Fairfax: Another common link in many of the schemes is law firm Evans Ellis. Trust accounts controlled by the firm were used for the Bendigo project. Evans Ellis also represents undisclosed owners of land via holding companies of projects in Melbourne’s west. Partner Ben Skinner claims Hermitage, Foscari and Veneziane were legitimate land subdivision projects “in accordance with standard industry practices.” Kaye, Burn and Feldman all failed to return calls.
The whereabouts of the money is a key focus for ASIC’s investigators grappling with the details of the Bendigo scheme.
In an exclusive interview, the regulator’s financial enforcement leader, Tim Mullaly, points to a “degree of complexity” around the options agreements and how the money was to be used: “Whether or not the money must be kept on trust and, if so, for how long, or whether that money can be used for other purposes such as the development of the property so it can be subdivided”.
“At the moment, it is not clear what the obligations are…” he said.
21st Century: Options are a fee for service. They can be used any way the developer decides.
The developer has plans to develop the property one day. It is obligated in 21st Century Projects to refund option holders in 20 years if it hasn’t developed by then and such refunds are secured by option holders by a default charge over the value of the land. In absolute worst case scenario modelling shows the land assets would be 200% or more than the maximum potential refunds if the projects weren’t rezoned by then.
Fairfax: It’s not surprising then that Johnson is having sleepless nights. “I lie awake at night thinking. I’m a tradesman. I’m a straight-shooter. I was taught if you do the right thing, good things will happen. I feel taken advantage of.”
21st Century: Thanks to Fairfax trying to scare him and other investors that somehow they have lost money, when they haven’t, therefore, it’s no surprise he is losing sleep.
David should contact 21st Century with any questions or concerns and he will find his investments are intact for now. However, if the ASIC succeeds in court on Oct 8 2015, he will lose all his option rights due to ASIC’s deliberate motives to cause investor losses.
Fairfax: Just last week, McIntyre’s 21st Century wrote again to Johnson urging him to invest in its latest venture, an “exclusive cashflow” property opportunity in the Pilbara.
“As long as you have an income in excess of $80,000 (this can be combined) you can potentially secure one of these positively geared properties,” says the McIntyre promotion. “It all has to do with the mining boom which by the way has no chance of drying up any time soon.”
Fairfax conveniently forget to mention that it was a ‘no money down property’ paying $20,800 net per annum, an option only available to select clients. It’s hard to lose money if outlay is no money.
Fairfax: To which Johnson replied: “Are you f—— kidding me?”
* Not the investor’s real name. Identity withheld at his request
21st Century: Fairfax no doubt has withheld his real name, as he doesn’t want the client to find out the truth regarding his investments and to remain a victim of Fairfax’s conspiracy theories and blatant character assassination of McIntyre
Before starting a political party, McIntyre was warned that politics is a dirty business. However, he clearly had no idea of the extent the left wing media would go to target him.
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