Prominent Malaysian businessman Lee Seng Huang, 42, has been implicated in an explosive financial scandal surrounding Australia’s largest listed retirement village operator, Aveo, in which his family holds a 22.6 percent stake worth A$400 million (RM1.301 billion).
“I think it’s outrageous, extortionate, exploitative.” – John Lander, Australia’s first ambassador to Iran, who reportedly lost A$78,000 after two years of investing in an Aveo home.
“These are some of the worst contracts I’ve seen. The retirement village operator makes its money, when the person leaves the premises.So they’ve got an incentive to get people through and get that payday, when the person dies or exits the village.” – Gerard Brody, CEO, Consumer Action
A lengthy investigative report jointly undertaken by Australian publishing house Fairfax Media and Four Corners, a current affairs documentary programme by Australian broadcaster ABC, claimed to expose a long-running swindling racket by Aveo in its 89 retirement villages with a 13,000-population across the country.
The multimedia series of articles and video documentary that also ran in the Sydney Morning Herald showcased interviews with numerous elderly residents, their families and legal representatives who claimed that Aveo’s glossy brochures and slick marketing misled investors into buying and later selling or being forced to exit their homes in the retirement villages through dubious business practices that resulted in great stress and significant financial losses, including converting their freehold premises into leasehold.
“This model to me is a ‘get poor quick scheme’ for the individual investor in a property or retirement village, and it’s a get rich quick scheme for the operator of the retirement village,” former Aveo resident John Lander said in a 1.20-minute video clip of a documentary posted on Four Corners’ Facebook account last night.
Lander, 72, who was Australia’s first ambassador to Iran, was reported to have lost A$78,000 after two years of investing in an Aveo home.
The extensive investigation report that was also published by Australian daily The Age yesterday included input from lawyers and consumer advocates who alleged that Aveo was the “most aggressive listed operator in the country” that slapped a hefty 40 percent exit fee on residents who wanted out after two years as part of its tactics for a generate a higher “turnover” of residents.
The Age also reported that Aveo, which has a market capital of A$1.6 billion, doubled its profits to A$116 million last year.
An older business report by The Star dated February 18 last year highlighted that Aveo’s majority shareholder to be the Australian associate company of listed Malaysian conglomerate Mulpha International Berhad, which is 40 percent owned by the Lee family.
According to media reports, the Lee family also owns extensive finance and real estate assets in South-east Asia, China, Hong Kong, Paris and London in addition to ski and beach resorts among luxury properties in Australia through Mulpha, which is chaired by the youngest son of tycoon Lee Ming Tee.
Ming Tee made headlines in 2004 after he was convicted and jailed a year for falsifying corporate documents to escape Hong Kong’s share disclosure laws over his Allied Overseas Investments firm in the 1990s.
Seng Huang, who has an older brother and sister, is the executive chairman of Mulpha where he is said to receive a total calculated compensation of US$38.94 million, according to Bloomberg research data.
He is also the non-executive chairman of Aveo, formerly known as the FKP Property Group, and a director of Aveo Funds Management Ltd.
He is a non-executive director of the Mudajaya Group Berhad with stakes in the energy, construction, property, manufacturing and trade sectors, and was formerly a director at Sun Hung Kai & Co, Hong Kong’s largest investment institution.
The Age reported Seng Huang had declined to comment on the Fairfax-Four Corners report, but Aveo responded to media questions in a 19-page statement. – Malay Mail Online