Login
ISCOVER
The corporate regulator has used a Federal Court action to warn spruikers not to cross the line that separates real estate from financial services.
ASIC has started proceedings in the Federal Court of Australia against companies associated with Jamie McIntyre and the 21st Century Group regarding their promotion of five ‘land-banking’ schemes.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
The regulator has alleged that the schemes are unregistered managed investment schemes and that the 21st Century Group and Mr McIntyre have been unlawfully carrying on an unlicensed financial services business.
Land banking is a property investment scheme in which a promoter acquires large blocks of land – often in undeveloped rural areas – and then offers portions to investors.
Promoters typically emphasise the high potential returns available if the land is redeveloped or if plans for rezoning and development are finalised.
ASIC said that while it does not regulate direct property investment, some land-banking schemes may be a managed investment scheme or a financial product. As a result, the promoters would need a financial services licence and to register the schemes with ASIC.
Four of the five land-banking schemes involving Mr McIntyre and the 21st Century Group are in regional Victoria, while the fifth is in regional Queensland.
The regulator believes there are more than 100 investors in the schemes, which it said have been promoted to investors by entities associated with Mr McIntyre's 21st Century Group.
“ASIC is seeking orders to appoint a provisional liquidator or receiver and manager to each of the five schemes and the development companies in order to take control of any assets and protect the interests of investors,” it said.
“ASIC is also seeking orders that each of the defendants, including Mr McIntyre, be restrained from promoting, further promoting or operating any of the schemes and from operating a financial services business.”
Mr McIntyre was contacted for comment, but he did not respond to a voice message.
The matter is set down for a first hearing on 14 August.
ASIC’s proceedings are part of a wider and ongoing investigation into land-banking schemes.
The regulator last week settled proceedings against Midland HWY, which was the developer of a land-banking scheme that was also promoted by the 21st Century Group.
[Related: Spruikers not brokers 'creating the problem' with SMSFs]
