Court winds up Lion, refers liquidators to police
The Supreme Court this week wound up Lion Property Group and the investment funds it managed after claims of financial misappropriation.
Justice Patricia Matthews also ordered the provisional liquidators to refer a report to Victoria Police along with servers, hard drive and email account details obtained as part of its investigation.
Besieged investors funded the legal action after ASIC decided not to pursue their complaints in June, allowing the company to seek more clients.
Led by John Sader and Garry Pesochinsky – the latter connected to the failed Full Circle business – Lion has offices in South Melbourne and Brisbane’s Clayfield.
In evidence provided to the court, some $120 million in investor funds were paid into special purpose vehicles, which would fund the project, including in some cases, a $3.7m upfront fee to the directors.
Investors were told their loans were secured against the properties – which wasn’t the case, with a range of registered mortgagees in recent months selling sites including at Brighton, Hawthorn East and South Yarra.
Another at Camberwell, with part-built townhouses (pictured, top), a project Lion is still marketing on its website as Eminence, was listed this month via Stonebridge Property Group’s Andrew Milligan, Julian White, Chao Zhang and Lucas Duffy.
Ponzi scheme claim
Lawyers representing the investors claim the business was run as a Ponzi scheme, a claim Mr Sader and Pesochinsky denied in June when the court appointed an auditor.
Many projects on its books were delayed – a claim backers say was deliberate.
Lion also, they say, largely stopped paying unitholders monthly distributions at the end of last year.
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