PROPERTY investment scheme The Key Result was never a “ripoff” or “get rich quick plan”, according to former director Peter Scully.
Mr Scully defended the scheme after it was criticised by several Pakenham residents who said they wished they had never been involved in it (Gazette, 14 December 2005).
The Narre Warrenbased firm recently went into liquidation owing a reported $2.6 million.
The Key Result scheme matched potential homeowners with property investors.
It offered a fiveyear leasetobuy arrangement that was meant to make housing more affordable.
Mr Scully said there were a multitude of reasons why the scheme did not work.
“The scheme was set up to help people who wanted to buy their own home but could not get finance,” he said.
Mr Scully said The Key Result was a business designed to grow by helping people.
He said many people were still benefiting from the system.
“It was never a ripoff or a get rich quick scheme, in fact, members of my own family were both home buyers and investors,” Mr Scully said.
“The advent of ‘low doc’ and ‘no doc’ loans reduced our market of potential clients.
“The new financial services regulations made it almost impossible for us to continue our budgeting system and finally the number of defaulting home buyers ate up The Key Result’s cash reserves.
“It was a doubleedged sword.
“On one hand, we had heavily reducing sales, therefore a large reduction in income.
“On the other, we had massively increasing expenses, being defaulting home buyers.
“In fact, of about 70 home buyers, there were 21 who were regularly defaulting.
“At the time we were making all their payments on their behalf.”
Mr Scully said more than $550,000 had been poured into The Key Result to try and save it and repay creditors.
“That simply wasn’t enough, hence the liquidation,” he said.
“We are now putting together a repayment plan for all creditors to ensure they receive their money back.”
Mr Scully said the aim was that no investors would lose their money.