Friday, 16 December 2011

Hillsong stung by Affinity fallout

Bankrupt ex-Affinity director
Daniel Ku. Photo: SiN Images.

THERE’S plenty of forgiveness in the Castle Hill chapter of the Hillsong church.

Three years after dozens of parishioners lost almost $5 million in bad property investments spruiked by two church members, SiN understands the pair still attend services.

Forgetting however, is not as easy. Former church member Dr Leslie Indrasith lost $400,000 investing in the high-yield property investments promoted by his fellow church goers, Daniel Kaming Ku, 40, Adrian Ming-Chi Chen, 36 and Darren Garwai Chek, 35.

The three men were founders and directors of Affinity Capital Pty Ltd, a property investment business that grew out of their work as mortgage brokers.

They initially funded Affinity through a mixture of loans from financial institutions, family members and friends.

But after the group collapsed in late 2008 owing almost $15 million to unsecured creditors, extensive investigations by liquidator Gavin Moss found no compelling evidence of fraud or Corporations Law breaches.

What Moss did find was a litany of the failings so prevalent across the property development sector.

"Bad management; excessive debt and under capitalisation; bad property developments" and "court actions taken by creditors" were among the reasons for Affinity's collapse Moss listed in his report to creditors.

Not content, Indrasith drafted then NSW premier Nathan Rees to his cause. With Rees's backing the medical scientist obtained funding from the Department of Fair Trading to pursue costly public examinations of Ku and Chen and Chek in the NSW Supreme Court.

Bankrupt ex-Affinity director
Adrian Chen. Photo: SiN Images
During one recent examination of Ku and Chen, it emerged that the Affinity directors, none of whom possessed an Australian Financial Services License (AFSL), advertised for funds through a publication called Christian Business Directory.

The court heard that the Affinity directors engaged an AFSL holder to ensure the fund raising prospectus complied with ASIC requirements.

Ku also told barrister Craig Carter that the funds were to be used to develop Affinity’s suite of mortgaged properties, confirming that Affinity sometimes promised annual interest returns as high as 30 per cent in a bid to lure investors.

Losses across the entire Affinity group may be as high as $30 million and in the wash up Ku and Chen have been declared bankrupt. Their affairs are now in the hands of trustee Max Prentice from BPS Recovery.

Further examinations are scheduled to take place early in the New Year. For Leslie Indrasith and other out of pocket Affinity investors, the results of his enquiries are unlikely to allay their sense of injustice, or restore the fortunes Affinity consumed.

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