Gunns deal still stings

How scheme’s lure of wealth turned to dust

KEN Welsford lost his entire nest egg – and his future – the day his managed investment scheme with Gunns Ltd went bust.

The former pharmaceutical company sales rep had been living the high life – travelling around the world for his job while diligently paying hundreds each month into his tree plantation scheme to prepare for his retirement.

Mr Welsford’s scheme, which was run by Great Southern but overtaken by Gunns Plantations Limited (GPL) when the former became insolvent, even charged him annual insurance fees.

After all that careful saving and investing over 10 years, he was expecting to retire in 2010 – at age 65 – with a healthy $200,000 payout to use to buy his own home at Lenah Valley.

But with Gunns Ltd already in dire straits, Mr Welsford didn’t receive a cent that year.

In fact, after the controversial forester collapsed in September 2012, and after its late managing director John Gay was convicted of insider trading, Mr Welsford said he was only handed over a measly $1200.

Now 75, Mr Welsford – who is from a pre-superannuation generation – lives in a modest unit at Rokeby and lives on the age pension.

He can’t afford to buy his own car and was forced to give up smoking years ago because of the costs.

“I didn’t get the payout. I didn’t think I’d have to retire on a pension,” he said.

“I was relying on this. I was going to use it to get a solid lifestyle.”

He said he contacted Gunns in 2010, furious that he didn’t get the return he’d been promised – but was stonewalled and advised not to get a lawyer because of the costs involved.

“They said ‘you’re wasting your time – $1200 is all you’ll get’,” Mr Welsford said.

“I was annoyed, angry.” Mr Welsford’s story comes after news that Mr Gay’s estate, former Gunns chairman and one-time Tasmanian premier Robin Gray, company secretary Wayne Chapman and GPL chairman Paul Teisseire are currently being sued by a group of former investors.

In a recently published judgment, the Supreme Court of NSW has agreed that the forester’s insurers, Catlin Australia and Chubb Insurance, can join the list of defendants that may be forced to compensate investors.

The failed plantation managed investment schemes have sometimes been described as “Ponzi schemes” since their collapse.

amber.wilson@news.com.au