UPDATE: FMA issues first stop order against company taking deposits for Auckland property investment
UPDATED: The Financial Markets Authority has issued its first stop order under the Financial Markets Conduct Act against Green Gardens Finance Trust Limited (GGFT) which has been taking deposits from people for Auckland property investments without complying with the law.
The FMA says it started investigating the Auckland company following a referral and sent repeated requests to it for information but received no reply. It is warning people to be wary of doing business or depositing money with the company but has no evidence so far of anyone having lost money.
The stop order, the first since the FMC Act took effect last year, prevents the company from offering, issuing, advertising and accepting applications and contributions for debt securities until the Act has been complied with.
Green Gardens Finance has been offering debt securities for a minimum $50,000 for fixed returns varying from 10 to 12 percent per annum for one to three-year periods without having the required product disclosure statement and a trust deed. The company's website said the investment would be part of a "Green Gardens Trust Fund" for the purpose of property development in the Auckland region.
The FMA can issue a stop order under the Act if someone offers investments that don't comply with the law.
"Green Gardens Finance is offering investments illegally and this stop order requires the company to comply with the relevant laws and warns people not to give money to the company," FMA's director of regulation Liam Mason said in a statement. "It is an offence to fail to comply with a stop order."
The FMA's investigation into the company is on-going.
Green Gardens Finance Trust, which changed its name from Southpac Finance Trust Limited, has put up a "coming soon" on the home page of its website, ggfinance.co.nz, but a Google search still turns up the investment offer behind that page.
The website said all investments will be guaranteed "by the property equivalently" and that a lawyer would conduct the housing mortgage contract. An English translation available of the Chinese version on the website says much the same thing though the English is fairly garbled.
The company's website said Green Gardens Finance Trust was a NZ-owned finance company providing personal and business investing solutions. No-one answered the contact number supplied on the website.
Hsin-yun Li is listed as the sole director of Green Gardens Finance Trust and the shareholders are listed on the Companies Office website as being Gang Wang, Yan Zhang, and the North Harbour Trustee Company which is owned by Michael Newdick and Michael Robinson. Stephen Grey resigned as a director of GGFT in December last year.
The company traded as Southpac Finance Trust until 2007 and then was restored onto the companies register in September last year.
The website says the company is one of the subsidiaries of Green Gardens Group which is owned by Thomas Gang Wang. Both companies have the same central Auckland office address.
The company said the Green Gardens Group had been in a unique position to benefit from land development and house sales and had 17 years' experience in subdivision and building houses. The Companies Office shows the company was only set up in April last year and changed its name in September from Greenland Construction Ltd.