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The financial services group that collapsed with millions of dollars of debt has said it was too diversified for its own good.
Adelaide firm Lending Solutions International collapsed on January 20 with debts of $9.6 million, according to liquidator Heard Phillips.
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Related entity Nova Real Estate was also liquidated on January 20, while two other related entities, Financial Wellness and EJ Property Developments, entered receivership on January 23. Their debts are not yet known.
All four businesses were part of the Charterhill Group, which offered a diverse range of services including mortgage broking, real estate marketing, contract negotiation and SMSF advice.
Charterhill’s sole director, George Nowak, told clients in an emailed letter that the group’s diversification strategy had led to its collapse.
“As you are aware, Charterhill Group and its associated entities have provided a ‘one-stop shop’ for our clients which is unique in Australia in this industry but, unfortunately, it has come at a cost,” he said in the email.
“The infrastructure required to perform all the various tasks involved in the process has been a severe drain on our cash flow and capital and we have reached the point where we can no longer function as a profitable business.”
Mr Nowak offered “sincere apologies” for the collapse, and said that he and his staff were “devastated” that Charterhill had let down its clients.
“As the sole director of the group entities I have already been in immediate contact with ASIC and provided full and open disclosure and am voluntarily working with ASIC throughout the investigative processes,” he said.
“I will cooperate to the maximum legal and statutory extent permissible with all insolvency personnel and statutory officers, so as to achieve the best result for everyone concerned given that a suitable time frame will allow a favourable outcome to be forthcoming to everyone.”
Mr Nowak could not be reached for comment. His mobile phone contains a recorded message directing callers to liquidator Heard Phillips.
