Property financier Wickham Securities’ investors hit by $30 million fall
Liam Walsh and James McCullough
The Courier Mail, January 22, 2013
Wickham Properties Pty Ltd was located in prestigious Wickham Tce., Brisbane whilst Wickham Financial Solutions had two locations, one at Victoria Point, and the other at Wishart, a southern suburb.
Wickham Securities specialized in mortgage financing. It had not flagged any financial difficulties to investors in the Annual Report released in September, but on December 21 2012 Administrators from PPB Advisory were called in.
It is reported that the company had $27 million in 20 loans, none of which were in arrears, with $147 million in property as security. It is perhaps surprising there were no loan defaults since borrowers were charged 21.3% interest on their loans.
The chairman of Wickham Securities was 59-year-old Brad Sherwin and with his wife Deborah, they operated several private companies, including the Financial Planning business. More than 300 owners of self managed superannuation funds it is believed agreed to invest their retirement savings in what they believed was a high yielding but reputable mortgage property business. They stand to lose collectively some $30 million.
The Administrator has not yet had time to evaluate what went wrong. However the corporate regulator has already announced that it is taking action against Brad and Deborah Sherwin, in the Federal Court, and they have frozen the transfer of certain funds.
It is premature to pass judgment on the propriety of the Sherwins’ business activities, but it can be said with some conviction that property mortgages for land developments are not suitable fixed interest investments for superannuation funds; particularly when the financial planner has an in-house arrangement with his/her own property business.