ASIC cancels credit licence in SMSF investigation
ASIC has cancelled the Australian credit licence of a Queensland credit provider as part of an ongoing investigation into a property and SMSF promoting group.
According to an announcement released this morning, ASIC has cancelled the Australian credit licence of Smithson & Baye Pty Ltd (Smithson & Baye), a credit provider based in Brisbane and Paradise Point, Queensland.
ASIC found that Smithson & Baye had contravened its obligations under the National Credit Act.
Further, ASIC found that 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 SMSF promoting group, ASIC stated.
The group includes the companies formerly known as 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 cases of advice given to investors to establish an SMSF for investment in real estate in Queensland and the arranging of finance for those investments, ASIC stated.
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, the regulator said.
In addition, 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 stated it also 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 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, ASIC said.
“Anyone who may have obtained credit from Smithson & Baye or Vegeta Pty Ltd should obtain independent legal advice concerning their rights and obligations,” ASIC stated.