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Angry investors steal Chartwell company recor -

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Angry investors steal Chartwell company records

The World Today - Wednesday, 23 April , 2008 12:17:00

Reporter: Rachael Brown

LISA MILLAR: Another share trading company has collapsed in Victoria, and administrators are
appealing to looters to return the company's records.

The Geelong-based Chartwell Enterprises has been placed in administration, and many local families
fear their life savings will be wiped out.

The collapse has stirred up bad memories in Geelong of the Pyramid Building Society failure in
1990, which crippled the city's economy.

Chartwell's administrators say they can't determine the company's position, unless stolen financial
records are returned.

Rachael Brown reports.

RACHAEL BROWN: Administrator Bruno Secatore admits he's not used to appealing to looters to get his
job done.

Distressed investors are reported to have gone on a rampage through the Chartwell Enterprises
office, and the word "liar" was scratched into the driver's door of the black Jaguar convertible
belonging to Chartwell's director, Graeme Hoy.

Mr Secatore says unless the looters return the crucial company records, they'll be their own worst
enemy.

BRUNO SECATORE: The task is going to be extremely difficult if we can't get those core records
back. Part of the records that were taken were also company chequebooks and bank statements, so ...
which is essential for us to get back.

RACHAEL BROWN: A creditors meeting is being planned for early May, but it's too early to know the
prospects for Chartwell's 80 investors.

Mr Secatore understands many investors were offered a 70 per cent return from Mr Hoy, but he can't
confirm reports the company is worth $70-million.

BRUNO SECATORE: We don't know what assets there are in there, what ... where these monies have been
invested, if they're still there. So it's certainly not trading on. It's surely going to be an
exercise of investigating to see where the monies have gone.

RACHAEL BROWN: He is one of the few who has spoken to Mr Hoy, and says the director is very
concerned.

BRUNO SECATORE: He met in our offices last night to formally appoint us, so he is quite shaken up
by the whole matter. In fact, I'll be in touch with him again this morning, so he's being
cooperative, but obviously he is trying to lie a bit low.

RACHAEL BROWN: Lying low he is, avoiding calls from many distressed investors, like Ann Abrahmsen,
whose superannuation and only source of income has been wiped out in the collapse.

ANN ABRAHMSEN: I put it with the person and it wasn't a company when I gave Graeme Hoy my funds,
and we entered into an agreement for him to trade my income.

RACHAEL BROWN: What would you like to say to Mr Hoy?

ANN ABRAHMSEN: I'd just like to know what happened. Yeah, I'd like to know what happened.

RACHAEL BROWN: It's deja vu for many Geelong residents who, two decades ago, were dealt a similar
blow by the collapse of the Pyramid Building Society.

Chartwell's collapse, following the similar demise of Opes Prime and Lift, have investors wondering
if their watchdogs, the corporate regulators, are doing their job.

ASIC (Australian Securities and Investments Commission) has confirmed it is investigating Chartwell
Enterprises, but has refused to comment further.

And the Federal Corporate Governance Minister, Nick Sherry, is similarly tight-lipped.

Associate Professor of Financial Markets at RMIT, Dr Terry Hallahan, says the 70 per cent return
Chartwell was offering should have run alarm bells a lot earlier

TERRY HALLAHAN: Long-term investments tend to average I think, you know, around eight per cent, if
you look at it over 30 or 40 years, and the sharemarket is six to eight per cent. So if you see
someone coming out and saying, "Ok, I'm going to give you 70 per cent or 100 per cent or something
like that", well you think, "That's fine, but why isn't everyone doing this?"

RACHAEL BROWN: The corporate regulators and indeed the Corporate Affairs Minister have been quiet
on the issue today. Do you think the watchdogs are going their job?

TERRY HALLAHAN: Well, I think there's quite a lot of regulation in the financial services area, and
it's all about giving people information to make informed decisions. So whether people actually
read that information, whether they understand what they're reading, is a different issue.

I think the Government has some programs now looking at financial literacy just to see how much
people do understand. At this stage we don't actually know what they were doing. These schemes,
these sort of schemes tend to be very complicated, and it often takes quite a while for the
information to come out to say exactly what they were doing.

It could be that they were meeting the regulatory requirements for these sorts of investments, but
they could be doing other things behind the scenes that you don't know about. These sort of schemes
tend to be localised, and I think in this case, looking at the newspapers, they were saying that
it's a lot of the business was done through family referrals in the local area and that. If people
go to reputable financial planners and that you wouldn't get these sort of schemes recommended to
them.

LISA MILLAR: The Associate Professor of Financial Markets at RMIT, Dr Terry Hallahan*, ending
Rachael Brown's report.

*Editor's note: This transcript has been amended as Terry Hallahan was incorrectly identified as
Bruno Secatore in this story.