The corporate watchdog has been lashed for reacting slowly to a rent-for-life scam that ripped off seniors, leaving some homeless and couch-surfing.
The corporate watchdog has been lashed by a parliamentary committee over a rent-for-life scam that ripped off seniors and left some homeless, concluding it has “serious concerns” about how the regulator handled the rort.
Sterling First marketed itself as pairing up “smart property investors that are looking to get a better rental return with retirees that are looking to sign a long-term lease”.
Retirees involved in the scheme sold their homes to free locked-up capital, then moved into rental properties with the expectation they would stay there for the rest of their lives.
But the Sterling Group and Sterling Income Trust went into liquidation in 2019 – allegedly after trading while insolvent for months – and many of the lessees were forced out while others fought to keep a roof over their heads.
After holding an inquiry last year, the committee handed down its final report on Friday, blasting not just the Australian Securities and Investments Commission, but the entire regulatory framework around managed investment schemes.
“It is clear to the committee that the Sterling Group was promoting a highly complex scheme based on a flawed business model that linked long-term tenancy to the performance of an investment,” they wrote.
“The promoters of the scheme did not have the necessary skills to undertake such a business…
