The Australian Securities & Investment Commission has cancelled the Australian credit licence of Queensland based firm Smithson & Baye Pty Ltd as part of an investigation into a property and SMSF promotion group.
According to ASIC, the firm had contravened the National Credit Act and was not fit and proper to be engaging in credit activities.
ASIC also found that 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 group of companies including the companies formerly called Heritage Financial Solutions Australia Pty Ltd (currently in liquidation) and Sunpac Finance Pty Ltd.
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 provided 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 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.
The watchdog also has concerns about how 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.
The cancellation of Smithson & Baye's credit licence means it is no longer permitted to collect interest payments or receive repayments of capital from borrowers and will be in further breach of the National Credit Act if does so.
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.
As part of the investigation, ASIC cancelled the credit licence of Heritage Financial Solutions on 16 April 2015 and the credit licence of Sunpac Finance on 4 June 2015.
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