Senator Nick Xenophon has written to former California governor Arnold Schwarzenegger, calling on him to return appearance fees for a company associated with a ‘land banking scheme’ that left hundreds of Australian investors out of pocket.
A Senate committee hearing in Melbourne on Thursday heard from the promoter and victims of the scheme. Land banking involves selling options on sites of potential future land development. One of the schemes promoted by 21st Century Group brought Mr Schwarzenegger to Australia to take part in its ‘2013 National Tour’ – a series of seminars that brought the company significant publicity – and investors.
In August, Australia’s corporate and securities regulator ASIC announced it had begun proceedings in the Federal Court against companies associated with the 21st Century Group in relation to five land banking schemes in Victoria and Queensland, which the companies promoted without a financial services licence.
The regulator has asked the court to appoint external managers to each of the schemes so that their operations can be investigated.
Investors reportedly could lose upward of $20 million from the schemes that Schwarzenegger is believed to have been paid hundreds of thousands of dollars to promote.
“It’s clear that there are many investors in these schemes that invested as a result of celebrities like Arnold Schwarzenegger coming along to these seminars and being a part of it,” Senator Xenophon told reporters.
“I think Mr Schwarzenegger has a moral obligation to have done his due diligence and at this stage he ought to be giving back the money he made from these seminars to the many, many people who have complaints about the investments they made.”
Senator Xenophon said celebrities needed to bear a degree of responsibility when investment schemes they endorse go wrong.
“I’m not in any way suggesting Arnold Schwarzenegger was aware of the history of this company, but now that many innocent battlers who invested in these schemes have been hurt, he should do all he can to assist.
“Schwarzenegger needs to come back to Australia to explain his involvement in these property-spruiking seminars,” he said.
