They are the people who run one of Australia’s largest retirement village businesses which this week has been accused of long-running scams against their elderly clients. But amongst the cabal of financiers, property developers, traders, lawyers and accountants who infest the corridors of AVEO, there is not one person on its board or leadership team who seemingly has any sort of real-world experience or knowledge of the aged-care sector.
A major joint investigation by ABC’s Four Corners program and Fairfax Media this week has discovered shocking details of widespread legalistic ripoffs and scams targeting the elderly and their families during one of the most vulnerable time of their lives.
The investigation has highlighted, in particular, how AVEO forces the buyers of its retirement village units to essentially always lose out tens of thousands of dollars due to unfair contracts relating to freehold and leasehold units that are purchased.
AVEO has also been accused of operating a ‘churn model’ where it attempts to remove residents from their homes so as to pick up tens of thousands of dollars each time though ludicrous “exit fees” and then sneakily purchase the units back for themselves.
The company has also been accused of not only neglecting the safety and wellbeing of its elderly residents, but in some cases even targeting them for a campaign of bullying, harassment and lies – including false claims that residents have Alzheimer’s – in a greedy bid to force them to move and give up their units.
It is believed that almost 200,000 Australians currently live in retirement villages across the country. AVEO itself operates about 100 retirement villages that are home to 13,000 retirees across the country. The company is also planning on building a $1 billion complex in south-east Queensland, consisting of 2,500 dwellings.
Last year, AVEO recorded a profit of $116 million, double from the year before.
Until 2013, AVEO was known as FKP Group. The property development company can trace its history back to 1970 with FKP forming from the merger between Peter Kurts Properties and Forrester Parker Group.
The name change to AVEO occurred after investment bank Goldman Sachs was brought on in February 2012 to help undertake a “strategic review” of the company’s then struggling aged-care business. At the time, Malaysian company Mulpha International had a 26% stake in FKP while Australia’s largest listed residential developer, Stockland, had a 14% share.
Unsurprisingly, with such long term unethical behaviour alleged to have taken place at the company, True Crime News Weekly can reveal that the entire board of directors of AVEO and its entire executive leadership team has not one iota of qualified aged-care experience or skills between them. Perhaps even of less surprise, it seems the skills and knowledge they do possess largely only consists of manipulating financial and business markets to their advantage.
WHO ARE THE PEOPLE BEHIND AVEO?
The company is led by its director, Seng Huang Lee, with his family-owned company Mulpha the largest shareholder of AVEO. Mr Lee, is the son of former corporate high-flier, Lee Ming Tee, who was jailed in 2004 in Hong Kong over corporate fraud relating to the profits of a listed company he was chairperson of. Mr Huang Lee became non-executive chairperson of AVEO in 2006. Educated at the University of Sydney, Mr Huang Lee’s official biography states that he has “wide experience in the financial services and real estate investment industry in the Asian region”.
AVEO’s current CEO happens to be an old work colleague of Mr Huang Lee’s from his time at Mulpha. In the position since 2013, Geoff Grady initially joined AVEO as its chief operating officer in 2009 after acting as the CEO for Mulpha Sanctuary Cove since 2002. Mr Grady has also worked as a partner of KPMG. He holds degrees in commerce and law from the University of Queensland. Mr Grady is also listed as AVEO’s executive director.
Also on the board is Diana Saw; who much like her colleagues doesn’t seem to have any qualifications in aged care or education in the field. Instead, Ms Saw has “five years’ experience in senior roles in Australia and overseas, primarily in the areas of property finance and investment”.
Despite her lack of any aged-care experience, the “risk management” expert however is proud to state on her bio that she was previously a senior executive at Babcock & Brown – one of the discredited and corrupt global financial advisory firms responsible for the Global Financial Crisis 10 years ago.
Another board director is Walter McDonald. He is a lawyer and also currently a partner at Piper Alderman in its corporate division. Mr McDonald claims his expertise lies in “government, corporate, mergers and acquisitions, energy and resources, corporate finance”.
Jim Frayne is another director of AVEO. According to his bio, “he has over 40 years’ experience in chartered accountancy in audit and corporate services fields”.
Eric Lee and Kelvin Lo round up the board. Mr Lee is currently the group chief financial officer for Mulpha International Berhad, which is the parent of Mulpha Australia Limited, which as mentioned previously is Aveo’s largest single securityholder. Prior to joining Mulpha, Mr Lee was the executive vice-president of Alliance Financial Group. He also spent 12 years with Microsoft as its chief financial officer for the Greater China region as well as serving as finance director for the Asia-Pacific region.
Meanwhile, Mr Lo has been working in the legal and “funds management business” of the Alliance Law Group since 2007.
Mr Lo – who has strong ties to Hong Kong – is also an independent director of OUE Limited which is described as a “diversified real estate owner, developer and operator with a real estate portfolio located in prime locations in Asia and the United States”.
AVEO’s executive leadership team headed by Mr Grady includes only two other people – both of whom are property developers or real estate and corporate experts with no qualifications or employment history on the frontlines of aged-care.
Gary Kordic joined AVEO in September 2011 as its executive general manager responsible for developments in Queensland and Victoria. A senior property executive for many years, Mr Kordic has previously been employed by Sunland Group as its Australian housing and land manager. He was also a director of the Land Development Departments of International Consulting practices.
Last but not least, David Hunt is AVEO’s chief financial officer. In the role since April 2010, Mr Hunt, who apparently has over 20 years’ experience in the field, was previously the chief financial officer of ING Real Estate Investment. Earlier roles include positions as group general manager of finance at Stockland, and group financial controller and finance manager at Zurich Financial Services.
Since the airing of the major investigation into AVEO, there are now calls for the Federal Government to step in and introduce proper regulations to police the growing industry.
With the revelations of the last week, one wonders if any of AVEO’s directors or members of its senior leadership team would ever be happy to see one of their elderly family members stuck in one of their retirement villages. Who knows, maybe they’d be overjoyed to be gouging money from their dying relatives, too?