Investors left high and dry by Siti liquidation
A Queensland residential investment manager has been put into liquidation, leaving hundreds of mum and dad investors out of pocket.
SITI Financial Services and SITI Group have been placed into liquidation by the Brisbane Supreme Court, with Justice Douglas stating in his judgment that he could not be satisfied the companies were solvent based on the evidence presented to the court.
He said it was clear the fund manager was insolvent and SITI’s counsel had failed to argue to the contrary.
According to Australian Securities and Investments Commission (ASIC) records, Michael Steele and Derek O’Neill have been directors of the SITI Companies in the last 12 months and have been associated with at least 10 other companies.
The move to put SITI in liquidation was initiated by Irish Bentley Lawyers in Brisbane on behalf of 108 creditors of the fund manager.
The manager offered investors residential properties with guaranteed rents, thereby delivering fixed returns.
Irish Bentley partner Scott Taylor said investors were offered packages for building investment properties, obtaining finance and arranging tenants as well as rental guarantees of up to five years to assist with mortgage repayments.
“We were approached by a number of property investors who claimed SITI Financial Services Pty had been refusing to pay rent owing – despite collecting the rental money,” he said.
“We decided to pursue the course of liquidating the companies to protect investors’ assets from any further losses.”
Taylor believes there may be hundreds of Queensland investors in SITI and the liquidator, McLeod & Partners, will be examining the financial position of the company in the next month.
According to documents submitted to the court, National Australia Bank has a charge over some of the assets, and the failed fund manager also owes money to the Australian Taxation Office.
“A number of our clients have experienced significant financial hardship as many have young families and have had to dip into life savings and borrow money from family members to pay the mortgages.”
According to Taylor, the claims by investors range from as little as $2,000 up to $15,000.
“[Many] were first homeowners who looked to earn some extra income from residential property investment,” he said.
AUTHOR
Recommended for you
Over half of wealth management clients in Asia-Pacific say they are looking for more advice in investment and financial planning services, according to EY, and may switch or add new providers to achieve this.
As artificial intelligence continues to reshape how the advice industry operates, Adviser Ratings unpacks which areas advisers are using the technology to improve the client experience.
Insignia Financial has appointed the former APAC head of a global asset manager to its board.
Financial advisers have been warned against advising clients to withdraw superannuation for medical or dental treatments as a new report highlights the long-term effect on balances at retirement.
