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15-228MR ASIC cancels Australian credit licence of Queensland company involved with property promoting group
ASIC has cancelled the Australian credit licence of Smithson & Baye Pty Ltd (Smithson & Baye) (ACN 161 713 159), a credit provider based in Brisbane and Paradise Point, Queensland.
ASIC found that:
- Smithson & Baye had contravened its obligations under the National Credit Act;
- it had reason to believe that Smithson & Baye was likely to contravene its obligations under the National Credit Act;
- it had reason to believe that Smithson & Baye is not fit and proper to engage in credit activities; and
- there is no reasonable prospect that the defects in Smithson & Baye's compliance with the National Credit Act can or would be remedied.
The cancellation of Smithson & Baye's credit licence is part of an ongoing ASIC investigation into a property and self-managed superannuation fund (SMSF) promoting group. The group includes the companies formerly called Heritage Financial Solutions Australia Pty Ltd (in liq) (Heritage Financial Solutions) and Sunpac Finance Pty Ltd (Sunpac Finance). The sole director and shareholder of Smithson & Baye, Mr Ricardo Viana, is also the sole director and shareholder of Sunpac Finance.
ASIC's investigation involves advice to investors to establish an SMSF for investment in real estate in Queensland and the arranging of finance for those investments.
Smithson & Baye purported to have accepted assignment of, and was collecting payments from borrowers in respect of, additional loans provided to clients of Heritage Financial Solutions and Sunpac Finance, beyond that which mainstream lenders would lend, to assist those clients to purchase real estate in Queensland through SMSFs.
ASIC found that Smithson & Baye failed to keep adequate financial records, comply with notices to produce documents, comply with its licence conditions, ensure its representatives comply with the credit legislation and ensure its representatives were adequately trained.
Separately, ASIC has concerns about the way the loans and property ownership have been structured and advises anyone who obtained advice or finance from people associated with Heritage Financial Solutions, Sunpac Finance, Smithson & Baye or Vegeta Pty Ltd (in liq) to contact their lender and obtain independent professional advice to ensure that the loans to their SMSFs and their property ownership have been structured in compliance with the trustees' superannuation law obligations.
Following the cancellation of Smithson & Baye's credit licence, it is no longer permitted to engage in credit activity regulated by the National Credit Act and will therefore be in breach of the National Credit Act if it continues to collect interest payments or receive repayments of capital from borrowers in respect of that regulated activity.
Anyone who may have obtained credit from Smithson & Baye or Vegeta Pty Ltd should obtain independent legal advice concerning their rights and obligations.
ASIC's investigation is continuing.
Smithson & Baye has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
As part of this investigation ASIC cancelled the credit licence of Heritage Financial Solutions on 16 April 2015 (see 15-102MR) and the credit licence of Sunpac Finance on 4 June 2015 on Sunpac's own application.
Editor's note 1:
On 8 September 2015 Smithson & Baye applied to the Administrative Appeals Tribunal for a review of ASIC's decision. No hearing date has been set.
Editor's note 2:
This media release was edited on 18 September 2015 to reflect:
- Smithson & Baye is no longer permitted to engage in credit activity regulated by the National Credit Act
- ASIC cancelled the the credit licence of Sunpac Finance on Sunpac's own application
Editor's note 3:
Smithson & Baye's appeal was heard by the Administrative Appeals Tribunal from 7-12 April 2017. The Tribunal has reserved its decision.
Editor's note 4:
On 29 March 2018, the AAT affirmed ASIC's decision.
Editor's note 5:
On 27 April 2018, Smithson & Baye filed an appeal of the AAT’s decision in the Federal Court of Australia.
Editor's note 6:
On 7 November 2018, the Federal Court allowed the appeal and ordered the AAT decision of 29 March 2018 be set aside.
The Federal Court remitted the matter to the AAT, to reconsider its decision on whether the company should be permitted to engage in credit activities and if so, on what conditions. No dates have been set by the AAT for the further hearing.