BANGKOK expat investors who lost millions of dollars in a failed property scheme in Australia’s Gold Coast have reacted with shock and anger after a judge in Australia threw out a civil case against Peter Drake, founder of the doomed LM Investment Management, and two other directors.
LMIM was placed into voluntary administration in March 2013, wiping out nearly all of the 800 million Australian dollars that had been invested in three of its funds by some 12,000 investors in Thailand, Australia, and other Southeast Asian nations.
The case collapsed after a witness provided by the corporate regulator ASIC (Australian Securities and Investments Commission) had shown evasiveness and gave preposterous testimony, the court said.
“I’m shocked, angry, freaked out, and in total disbelief that an Australian organisation of ASIC’s stature basically failed to nail Drake and his directors,” said a British expat in Bangkok who lost his life savings in the LM debacle. “What incompetence.
“What galls me is that lots of us in this terrible situation were hoping that something positive would come out of this court case. But Peter Drake and his directors have been let off when there’s been so much evidence against them. It’s simply astonishing.”
Another angry victim of LM’s collapse pointed out that the majority of investors were semi or fully retired expats. “Many have been left almost destitute,” he said.
LMIM was placed into voluntary administration in March 2013, wiping out nearly all of the 800 million Australian dollars that had been invested in three of its funds by some 12,000 investors in Thailand, Australia, and other Southeast Asian nations.
The case collapsed after a witness provided by the corporate regulator ASIC (Australian Securities and Investments Commission) had shown evasiveness and gave preposterous testimony, the court said.
“I’m shocked, angry, freaked out, and in total disbelief that an Australian organisation of ASIC’s stature basically failed to nail Drake and his directors,” said a British expat in Bangkok who lost his life savings in the LM debacle. “What incompetence.
“What galls me is that lots of us in this terrible situation were hoping that something positive would come out of this court case. But Peter Drake and his directors have been let off when there’s been so much evidence against them. It’s simply astonishing.”
Another angry victim of LM’s collapse pointed out that the majority of investors were semi or fully retired expats. “Many have been left almost destitute,” he said.
To investigate the fund after its collapse, some 750 investors set up the LM TIG (Thai Investor Group) and the LMIVC (Investor Victim Centre). During visits to the Gold Coast, representatives of the two groups claimed they found many shortfalls and lack of controls in the LM set-up, and suggested that it was a Ponzi scheme.
Representatives also met the Australian and British ambassadors to Thailand to state their case. One of the group explained they had also contacted ASIC on numerous occasions between 2014-2016 to discuss their findings to supposed senior managers of the commission.
They further allege that the fraud was perpetuated with the support and recommendations of mainly British ‘financial advisers’ who used British or Isle of Man insurance companies such as Friends Provident International, Royal Scandia, and Royal London, which allowed LMIM on their platforms as a safe investment with good returns.
It was subsequently discovered that neither the financial advisers nor the British insurance companies had a license to operate in Thailand and were therefore illegal.
“Many investors were told by the insurance companies that LM’s collapse was not their problem, that they only did what investors instructed them to do,” said an expat investor. “Also, to our horror, they advised they never carried out any due diligence on these funds.
“Many of the British-run financial advisers have been put on the SEC Alert List and some have been passed to the Thai Royal Police Economic Crime Division (ECD) for criminal investigation. This has led to the CEOs and several others involved in at least two British-owned FAs to flee the country in recent months.”
The investors’ group is now awaiting the final results of the Australian judge’s report to ASIC to see why they lost what they believed was a water tight case.
“We are also looking at redress currently with a professional financial services investigator to go after the multi-billion UK based insurance companies due to their lack of due diligence, marketing their products through unlicensed FAs who acted as their agents and their lack of a licence to operate in Thailand and other South East Asian jurisdictions,” said a spokesman.
ASIC’s case focused on a 280 million Australian dollar loan to Maddison Estate, a residential controlled by Drake. The loan gradually increased over time from 40 million in November 2007 to 280 million in August 2012, the year before LM collapsed. Much of the money came from LM’s Managed Performance Fund, which was not regulated under Australian law because it was offered to offshore investors.
The humiliating defeat for ASIC is likely to further dent Australia’s reputation as a safe place to invest.
The owner of Global Investments, one of the FAs recommending LM to Bangkok investors, has left Thailand. “Personally, I will be spending more time in Africa and Latin America,” Neil A. Robbirt has told clients. It is understood that Robbirt has sold his homes here along with his yacht.
Representatives also met the Australian and British ambassadors to Thailand to state their case. One of the group explained they had also contacted ASIC on numerous occasions between 2014-2016 to discuss their findings to supposed senior managers of the commission.
They further allege that the fraud was perpetuated with the support and recommendations of mainly British ‘financial advisers’ who used British or Isle of Man insurance companies such as Friends Provident International, Royal Scandia, and Royal London, which allowed LMIM on their platforms as a safe investment with good returns.
It was subsequently discovered that neither the financial advisers nor the British insurance companies had a license to operate in Thailand and were therefore illegal.
“Many investors were told by the insurance companies that LM’s collapse was not their problem, that they only did what investors instructed them to do,” said an expat investor. “Also, to our horror, they advised they never carried out any due diligence on these funds.
“Many of the British-run financial advisers have been put on the SEC Alert List and some have been passed to the Thai Royal Police Economic Crime Division (ECD) for criminal investigation. This has led to the CEOs and several others involved in at least two British-owned FAs to flee the country in recent months.”
The investors’ group is now awaiting the final results of the Australian judge’s report to ASIC to see why they lost what they believed was a water tight case.
“We are also looking at redress currently with a professional financial services investigator to go after the multi-billion UK based insurance companies due to their lack of due diligence, marketing their products through unlicensed FAs who acted as their agents and their lack of a licence to operate in Thailand and other South East Asian jurisdictions,” said a spokesman.
ASIC’s case focused on a 280 million Australian dollar loan to Maddison Estate, a residential controlled by Drake. The loan gradually increased over time from 40 million in November 2007 to 280 million in August 2012, the year before LM collapsed. Much of the money came from LM’s Managed Performance Fund, which was not regulated under Australian law because it was offered to offshore investors.
The humiliating defeat for ASIC is likely to further dent Australia’s reputation as a safe place to invest.
The owner of Global Investments, one of the FAs recommending LM to Bangkok investors, has left Thailand. “Personally, I will be spending more time in Africa and Latin America,” Neil A. Robbirt has told clients. It is understood that Robbirt has sold his homes here along with his yacht.
