Title : Razzle dazzle 'Ponzi' parties lure Asian investors into a $120m property bust
link : Razzle dazzle 'Ponzi' parties lure Asian investors into a $120m property bust
Razzle dazzle 'Ponzi' parties lure Asian investors into a $120m property bust
As Australian authorities continue to scrutinise the suspected Ponzi scheme masterminded by Pilbara businesswoman Veronica Macpherson, its overseas investors are embarrassed that they fell for her promises and bitter that Australia — a country they thought was safe for investment — has robbed them of their savings.
Key points
- Macro's overseas investors courted at lavish awards night and on tours of Pilbara
- One investor at awards night says there were 'no signs of Macro in any trouble'
- Another says scheme has left 'an indelible black mark on the image of Australia'
The stories of Malaysian investors paint a picture of a company which continued to court overseas investors, even while Australian authorities had banned it from promoting its Pilbara investment scheme, to keep money flowing into what the Australian Securities and Investments Commission (ASIC) has alleged is a Ponzi scheme.
The corporate regulator alleges that more than 1,600 of the 1,738 investors who lent Macro Group companies about $120 million were from Singapore and Malaysia.
A vivid example of the razzle-dazzle involved in courting overseas investors is a corporate video of a lavish awards night, held at the five-star Le Meridien hotel in Kuala Lumpur in March 2016.
The crowd — dressed up in keeping with the Oscars theme — was wowed by magicians and cabaret performers, and cheered on those who won awards for brokering high levels of investment in Macro.
"This has very quickly become our second-most productive region in the world, and I firmly believe this year it will become number one for next year!" a host exclaimed.
Seemingly in a parallel universe, at the same time, the company hosting the event had been banned by the Federal Court from promoting its Pilbara property investment and had stopped paying dividends to some investors.
From awards nights to paid tours of the Pilbara
The ABC has spoken to one Malaysian investor who attended the gala event, and who described it as "lavish" with "no signs of Macro in any trouble".
Like other Malaysian investors stung by the collapse of the Macro Group companies, the man — who wanted to remain anonymous — was no stranger to Macro's attentions.
He attended many of its investment seminars held in Penang, Kuala Lumpur and Singapore, and had been on one of Ms Macpherson's Pilbara tours for investors the previous year.
The man said the four-day tour of Newman — the home of Macro's planned flagship Newman Estate development — Port Hedland and Karratha — including flights from Perth, accommodation and meals — was free for anyone investing more than $50,000.
"When she talked to us, she gave a really good impression that she was someone we could trust with her words," he said.
On the trip, he was given a copy of the WA government's Pilbara Cities blueprint, which stated its intention to boost the population of Newman to 15,000 by 2035.
The Grylls interview and promises of high returns
The man, like other Malaysian investors the ABC has spoken to, said he was given the impression the Newman Estate development had WA government support, boosted by an October 2014 video interview between Ms McPherson and former Pilbara MP Brendon Grylls at the WA Parliament.
"His name was used by Veronica a lot, very often," he said.
Mr Grylls has requested the video be taken down from the company website, but this has not been done.
However, with the benefit of hindsight, investors now see the promises of high returns on their investment — some people were promised up to 36 per cent — were too good to be true.
They believe they will never see their money again.
"I did have my doubts," the anonymous investor said.
"But subsequently I did reinvest, because we were kind of blinded by the high returns of the dividends we were receiving."
Retiree sold on homes for FIFO workers
Tin Chin Huat, a retiree from Penang, invested his savings of $60,000 in Macro in late 2015 and early 2016, but his monthly dividend payments stopped in February 2016.
He invested after attending a seminar in Penang, where he was offered a higher return if he signed up on the spot.
A devout Christian who planned to use the proceeds of his investment to support churches and missionary work, Mr Tin said he felt compelled to get in on the scheme to support FIFO workers.
He said Ms Macpherson outlined her plan at the seminar to build high-quality homes for mine workers in Newman, so they would not have to live in FIFO camps.
"She told us because she felt pity for the fly-in fly-out people, that's why she made this project," he said.
"From what she presented in the seminar, we thought she was a very sincere person."
Investment for son's uni fees ends with Australia tarnished
Kuala Lumpur-based Chu Chee Chean is a seasoned overseas investor who has fond memories of his time as a university student in Sydney.
Beginning in mid-2015, Mr Chu invested $130,000 in the suspected Ponzi scheme, and planned to use the returns to fund his son's medical school expenses at a Sydney university.
What is a Ponzi scheme?
- Ponzi schemes often have little or no real investments or assets
- Investor returns are paid from money generated from later investors in the scheme
- Warning signs include a rate of return on an investment that's too good to be true
- Eventually the scheme falls apart
Mr Chean asked extensive questions about Macro's financial stability and due diligence procedures before investing via a Singapore-based company which has since shut down.
"It was the 17 per cent returns that was too good," he said.
"I started small at first and then I kept growing. When you see money coming in, you tend to relax a bit."
Mr Chean attended many of the seminars where he said videos of Ms Macpherson, including her interview with Mr Grylls, were played.
"It came across really impressive. But at the end of the day, that's all I can say about her — she's quite impressive," he said.
He said he could tell something was wrong in early 2016 when his dividend payments stopped and, he claimed, Ms Macpherson began to offer alternative investment schemes and her communication dropped off.
Mr Chean's experience has soured his view as Australia as a safe destination for investment because, he said, Ms Macpherson should not have been allowed to continue to promote the scheme overseas.
"[It] has left an indelible black mark on the image of Australia, a country I once eschewed as a land of fair and equitable opportunities," he said.
The price paid for Macro
Ms Macpherson was recently declared bankrupt and her assets and passport are under the control of her bankruptcy trustees, Daniel Juratowitch and Dino Travaglini.
Her restriction on providing financial advice or running a financial services company expires at the end of June.
Singaporean police are still investigating one of Ms Macpherson's Singapore-registered companies which was also the subject of an investor alert by the Monetary Authority of Singapore.
She was fined $6,000 in the Perth Magistrates Court for offences including failing to provide a liquidator with information.
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