Ponzi victims keen for mansion to sell
AN auction today for a Sanctuary Cove luxury home will be keenly followed all the way from India.
That’s because the properties in question – 1019 Edgecliff Drive and an adjacent block at 1020 – was purchased in 2011 by Pearls group, via a related entity, for $4.9 million with Pearls allegedly using funds from a giant Ponzi scheme.
Pearls also bought the Sheraton Mirage Hotel on the Southport Spit for $62.5 million before that was offloaded for $140 million early last year.
The Pearls Ponzi scheme reportedly cheated up to 50 million Indians out of $10 billion.
The Indian investors burned by the scheme will be hoping to recoup money from the sale of the property by the receivers, Vincents, of Brisbane.
It is understood that the proceeds from the auction, if successful, will be delivered to the Indian government for disbursement to investors caught up in the Ponzi scheme.
The property was first auctioned in May, 2016, by Pearls, which
$4.6 million bid. Shortly afterwards the the Securities and Exchange Board of India (SEBI), which had cottoned onto the Ponzi scheme, took over before the Federal Court seized jurisdiction over the property and appointed receivers.
However, the saga did not end there.
Marketing agent Rick Graham, of LJ Hooker Surfers Paradise, said the property is without electricity because the power company, a creditor, has not been paid by the previous owner.
“If the receivers agreed to declined a pay the power company they would have become the preferred creditor, which they did not want to do,” he said.
In addition, because the power has been disconnected, the basement pump has not been operating for the past 18 months, leading to past flooding in the basement.
Mr Graham said he remains confident the property will sell today at the auction at 11am at the Sanctuary Cove Golf and Country Club.
He said he has received 92 inquiries and carried out 70 inspections during the threeweek auction campaign.
“There has been a lot of interest,” Mr Graham said.
“We have no idea what the price is going to be but whoever buys it has a bit of work in front of them.”
Pearls head Nirmal Singh Bhangoo was jailed in the wake of the collapse of the Ponzi scheme.
His daughter Barinda was able to enjoy the house, which has five bedrooms, six bathrooms, a lift, parking for six cars and a jetty.
However it is not known whether Mr Bhangoo, who apparently started out selling milk in a village in the Punjab, ever stepped through the mansion’s front door.