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Queensland developer Kawana Island Properties has fallen foul of ASIC after engaging in unlicensed credit activity.
ASIC announced yesterday that a Kawana company known as Franchelen loaned $7 million to 49 buyers after finishing a development project on the Sunshine Coast in 2010.
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“These loans allowed buyers to complete their contracts. At the time the loans were offered, Franchelen was unlicensed to engage in this type of credit activity,” ASIC stated.
The regulator said Franchelen had since been given a credit licence on condition that it limit its credit activity to the management and finalisation of the 49 loans.
Off-the-plan sales in Ocean Reach started in May 2008 and construction took place between mid-2009 and June 2010.
In 2010, the National Credit Code extended the definition of ‘credit’ to include the purchase of residential investment properties.
ASIC deputy chairman Peter Kell said firms had an obligation to understand the law.
“Further, they must ensure they are appropriately licensed to engage in credit activities. ASIC will act when we come across instances of unlicensed credit activity,” he said.
