'Why rent' promoter Ashenden convicted
The man behind a property scheme marketed with the phrase "why rent when you can own, rent is dead money" has been convicted in the Auckland District Court of misleading property hunters. Company director and bankrupt Christopher Mark Ashenden has been found guilty of breaching the Fair Trading Act, fined $237,048 and ordered to pay $42,764.
Ashenden ran a home finance scheme where his companies - The Home Finance Company Limited and Meguro Limited - purchased residential properties in south Auckland.
Theses were marketed using phrases such as ''why rent when you can buy'', but the people who signed up were granted only the right to occupy each property under a 30-year instalment agreement with various property investment companies.
On the properties' titles, the investment companies were recorded as their owners, with their own mortgages registered against them.
Purchasers through the scheme then made weekly payments of principal, interest, rates, taxes and insurance to the real owners, and were also required to fund any repairs the property required.
The court found it was not made clear to the occupiers that their agreements did not give them legal ownership of their property until the end of the 30-year period.
On sentencing Ashenden and his companies, Judge Moore said the offending contained strong elements of cynicism and the calculated exploitation of people.
"By encouraging vulnerable people in the mistaken belief that they were acquiring home ownership rather than a package of rights and obligations which, on any view, fell far short of that concept, folk were lured into commitments which were a recipe for disasters in which they lost everything they had put into the property they were seeking to acquire - indeed were given to understand they had acquired."
Judge Moore considered the voluntary bankruptcy, which was adjudicated in October last year, was no more than a ploy and was certainly not an indication of Ashenden's true worth.
The Commerce Commission says Ashenden owes money both in New Zealand and in Australia, although he now lives the United States where he promotes a health supplement product known as 'Brainquicken' on websites and in blogs.
"The commission is pleased the court has recognised that consumers caught up in the scheme suffered significant financial harm and distress and has ordered reparations as well as fines," says Commerce Commission enforcement manager Stuart Wallace.
"It is also encouraging to see that the courts are prepared to look past complex commercial structures to ensure that the people and entities that are instrumental in these schemes do not escape penalty."
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Civil action is continuing against Home Finance Company, Ashenden, and other investment companies involved in the home finance scheme.
- BusinessDay.co.nz
The man behind a property scheme marketed with the phrase "why rent when you can own, rent is dead money" has been convicted in the Auckland District Court of misleading property hunters. Company director and bankrupt Christopher Mark Ashenden has been found guilty of breaching the Fair Trading Act, fined $237,048 and ordered to pay $42,764.
Ashenden ran a home finance scheme where his companies - The Home Finance Company Limited and Meguro Limited - purchased residential properties in south Auckland.
Theses were marketed using phrases such as ''why rent when you can buy'', but the people who signed up were granted only the right to occupy each property under a 30-year instalment agreement with various property investment companies.
On the properties' titles, the investment companies were recorded as their owners, with their own mortgages registered against them.
Purchasers through the scheme then made weekly payments of principal, interest, rates, taxes and insurance to the real owners, and were also required to fund any repairs the property required.
The court found it was not made clear to the occupiers that their agreements did not give them legal ownership of their property until the end of the 30-year period.
On sentencing Ashenden and his companies, Judge Moore said the offending contained strong elements of cynicism and the calculated exploitation of people.
"By encouraging vulnerable people in the mistaken belief that they were acquiring home ownership rather than a package of rights and obligations which, on any view, fell far short of that concept, folk were lured into commitments which were a recipe for disasters in which they lost everything they had put into the property they were seeking to acquire - indeed were given to understand they had acquired."
Judge Moore considered the voluntary bankruptcy, which was adjudicated in October last year, was no more than a ploy and was certainly not an indication of Ashenden's true worth.
The Commerce Commission says Ashenden owes money both in New Zealand and in Australia, although he now lives the United States where he promotes a health supplement product known as 'Brainquicken' on websites and in blogs.
"The commission is pleased the court has recognised that consumers caught up in the scheme suffered significant financial harm and distress and has ordered reparations as well as fines," says Commerce Commission enforcement manager Stuart Wallace.
"It is also encouraging to see that the courts are prepared to look past complex commercial structures to ensure that the people and entities that are instrumental in these schemes do not escape penalty."
Ad Feedback
Civil action is continuing against Home Finance Company, Ashenden, and other investment companies involved in the home finance scheme.
- BusinessDay.co.nz
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