Investor update: Charterhill issues clients apology after closure
An email, sent out on Friday to clients from director George Nowak on behalf of the entire Charterhill Group of Companies, issued an apology for the lateness of communications after the "shock closure" of their entire group by receivers and external administrators.
This comes after reports that almost 140 investors' SMSF funds are at risk, or an estimated $6 million.
Noting that they had only just regained database and communication lines to address clients of the group, Nowak noted that the cash flow and capital of the business in providing the infrastructure for a 'one-stop shop' approach had been limited and caused the business to no longer be profitable.
"A 1st ranking secured creditor of Charterhill Group Pty Ltd and Financial Wellness Pty Ltd appointed a receiver last week and coincidentally an External Administrator has been appointed on 20/1/2014 to Nova Real Estate Pty Ltd and Lending Solutions Pty Ltd and will work through the complex business model and advise on the best outcome for all concerned over the ensuing weeks beginning with a 1st creditors meeting Friday 31/1/14," the email on Friday said.
He expressed his disappointment at what had occurred.
"We apologise again that our intended financial outcome you may not be realised but assure you we will assist the External Administrator with whatever information or assistance is required," he said.
However, the story doesn't all appear to be solved, and Property Observer has been approached by clients unsure about where they stand. He noted that clients of Australian Leasecorp Pty Ltd's rental guarantees that are currently in progress has seen their original external support subside. His email put the cause of this on the Mining Tax.
"To that end we have worked very hard in securing a major international group to provide our clients with a favorable and cost saving product for each landlord's consideration as a potential upside to the difficulties experienced throughout last year," he said.
Communications from Australian Leasecorp has been in lengthy negotiations with the company, he said, to secure an offer that presents good value for continuing with a rental guarantee.
Nowak notes that as the sole director, he has been in immediate contact with ASIC and has provided full and open disclosure. He also said that difficulties with accessing their database meant that not all affected investors would have access to the notice.
For the sake of the investors involved, Property Observer has reproduced the entire statement below:
CHARTERHILL GROUP UPDATE
Dear Clients of Charterhill
Firstly on behalf of the entire Charterhill Group of Companies I wish to sincerely apologise for the lateness of this communication to you but after the shock closure of our entire group by receivers and external administrators we have only just regained our database and communication lines to be able to formally address you.
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. The infrastructure required to perform all the various tasks involved in the process has been a sever drain on our cash flow and capital and we have reached the point where we can no longer function as a profitable business.
A 1st ranking secured creditor of Charterhill Group Pty Ltd and Financial Wellness Pty Ltd appointed a receiver last week and coincidentally an External Administrator has been appointed on 20/1/2014 to Nova Real Estate Pty Ltd and Lending Solutions Pty Ltd and will work through the complex business model and advise on the best outcome for all concerned over the ensuing weeks beginning with a 1st creditors meeting Friday 31/1/14.
Our sincere apologies that this has occurred as we have worked so hard over many years to fulfil our obligations to our valued clients but forces have worked against us and we find ourselves in this situation. Each and every staff member is bitterly disappointed that the commitment made to our clients cannot be carried through and along with myself are devastated with the outcome.
We apologise again that our intended financial outcome you may not be realised but assure you we will assist the External Administrator with whatever information or assistance is required.
In relation to you as clients of Australian Leasecorp Pty Ltd and the Rental Guarantees in progress, you are very aware that the mining sector suffered a severe blow when the Gillard government announced their intended Mining Tax, and as a result our original external support for the Rental Guarantee product subsided with that event causing the group further issues to contend with.
To that end we have worked very hard in securing a major international group to provide our clients with a favorable and cost saving product for each landlord's consideration as a potential upside to the difficulties experienced throughout last year.
PLEASE NOTE THAT THE EXTERNAL ADMINISTRATOR IS NOT INVOLVED WITH ANY MATTERS PERTAINING TO AUSTRALIAN LEASECORP SO PLEASE DO NOT CONTACT THEM FOR THIS MATTER.
For all those involved with Australian Leasecorp you will be receiving independent communication from the party with whom we have been in lengthy negotiations to secure an offer which upon review does present good value for continuing with rental guarantee certainty into the future. Full claims and business continuity communication lines are currently being reestablished and will form a key feature of the forthcoming proposal for Australian Leasecorp clients with current agreements in place.
My sincere apologies one again for the events which have occurred and my extreme apologies for the lateness of our address to you but as mentioned we have been extremely hampered with information and systems deficiency which has taken time to even partially restore.
Anyone affected by those entities involved in the receivership/administration process have already been contacted and communicated with independently. As we are not certain about the completeness of our recovered database, anyone who you know is associated with our group but has not received this communication please on send to them and advise me by return email to include their email details into our database for the assurance they are included in all communications by all parties.
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. 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 favorable outcome to be forthcoming to everyone.
My sincere apologies once again.
Yours sincerely,
AUSTRALIAN C.G.I. LTD
(shareholder of Charterhill Group PL and Financial Wellness PL)
GEORGE J NOWAK
DIRECTOR
If you have any more information, contact: news@propertyobserver.com.au
