Property scheme 'recipe for disaster' for vulnerable Kiwis

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The promoter of a property scheme in which vulnerable kiwis were tricked into thinking they were buying properties when they were not, has been sentenced in the Auckland District Court.

Christopher Mark Ashenden, director of the Home Finance Company and Meguro Limited, was found guilty of breaching the Fair Trading Act, fined more than $200,000 and ordered to pay reparation of more than $40,000 by the courts.

The court heard investor companies purchased residential properties in South Auckland using the property investment model promoted by Ashenden.

Those people who signed up to the scheme were then granted the right to occupy the property under a 30-year instalment agreement, while making payments of principal, interest, rates and insurance to the owners.

However Ashenden did not make it clear to these occupiers that their agreements did not give them legal ownership of their property until the end of the 30-year period.

Judge L H Moore said Ashenden's 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 said he had imposed hefty fines on Ashenden even though he was declared bankrupt last year.

Moor said he considered the bankruptcy as no more than a ploy and was certainly not an indication of his true worth.

"The court has no hesitation in concluding that Mr Ashenden is one of those people whose affairs are deliberately kept complicated to the point where it is exceedingly time consuming and expensive to unravel them..."

Civil action is continuing against Home Finance Company, Ashenden, and other investment companies involved in the Home Finance scheme.

- NZ HERALD ONLINE