NavraInvest Limited Deregistered by ASIC on 30 Nov 2020

Discussion in 'Accounting & Tax' started by Simon Hampel, 2nd Dec, 2020.

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  1. Simon Hampel

    Simon Hampel Founder Staff Member

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    On behalf of ex-NavraInvest shareholders, I've been monitoring the liquidation process for NavraInvest Limited and keeping people up to date over on https://www.sharesq.com/

    ASIC finally deregistered the company on 30 Nov 2020

    If anyone still has shares in NavraInvest Limited listed as an asset - you can now officially write them off as a capital loss (speak to your accountant / tax advisor about this to confirm).


    upload_2020-12-2_14-47-55.png

    Also - see PDF downloaded from ASIC attached.

    It's only taken nearly 8 years for the administration process to be completed :rolleyes:
     

    Attached Files:

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  2. Perky29

    Perky29 Well-Known Member

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    Thanks Simon.
    Will be good to write that off in a future CGT event when the day comes.
    Finally!
     
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  3. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Yes I believe the class action by investors which delayed matters was settled out of court last year.

    That said Steve Navra (AKA Navratil) flogged stock picker software years earlier and was outed by agencies then. I fail to see why anyone trusted him as financial planner flogging schemes or how someone gets to keep a license after that. Ah but there is always property spruiking seminars available. The great last hope when all else fails.

    Steve Navratil the great mentor
     
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  4. WashingtonBrown

    WashingtonBrown Active Member

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  5. Simon Hampel

    Simon Hampel Founder Staff Member

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    I was running the Navra Financial Services website at the time of the collapse of that company and so was party to many of the presentations made to their clients. I was never an NFS client - I was, however, an investor in NavraInvest and their managed funds. In the aftermath of the collapse, I heard dozens of tragic tales of people who had lost everything - some even had to come out of retirement because they no longer had any retirement funds :(

    While I do believe that Steve was as much a victim of the collapse of Great Southern as his clients were - and that the way the Great Southern loan book was sold and the lack of support from the government was unconscionable - the fact is that many of his clients were massively over-leveraged and were put into complex structures and managed investment schemes that they didn't fully understand but blindly trusted Steve and his team to continue to deliver the great results they had seen during the bull market leading up to the GFC.

    During the boom times, things were great - but when the music stopped, they had no way of adjusting to the new reality - indeed the advise they were given during the GFC simply compounded the problems in many cases - throwing good money after bad to try and recoup losses via increasingly desperate schemes.

    In hindsight, the fact that I was spending so much time explaining to people how Steve's structures worked, should have been a huge warning. There is something to be said for simplicity - a message that is preached by an increasing number of people here on PropertyChat.

    I'm disappointed that we never got to see how well (or not) the NavraInvest managed funds performed during an extended bear market - they moved the fund to 100% cash to protect the highly leveraged position of the Financial Planning clients (something which should never have been allowed in my opinion!) and so the fund never got an opportunity to deliver what was promised during the recovery phase.

    Lessons to take away from the saga:
    1. leverage is a great tool - but never forget that it works both ways and can become an anchor weighing your down in bad markets
    2. complex structures and investment schemes may look great on paper - but that complexity often comes at a huge cost, especially if you don't actually understand how things work. You lose flexibility and are often locked into long term structures which do not allow you to adapt to changing realities or changes in your own circumstances.
    3. be very wary of advisers who also sell financial products (eg managed funds) that they have a direct financial interest in. It's bad enough when advisers get paid commissions - it's even worse when they own the funds management company profiting from the investments made. I know a lot of this stuff would no longer be allowed under new rules - but the point still remains: advice must be independent.
     
  6. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I would rate #3 as #1. And a simple google search on the dude back in 2008 would have shown his past reputation for dishonesty and his 2001 bankruptcy. And while its easy to sit here now and say his advice wasnt independent there are many gullible people who will accept anything a nice face tells them. Its a salesman and conman in a suit. I bet they all thought he was a top bloke. Great Southern was nothing but a scam and Ray Charles would have seen it would collapse. Greed is what created it. Only dishonest planners made $$ and any idiot planner knew it was a ponzi scheme. There should be a criminal onus on advisers but there still isnt one.

    The managed fund didnt abide by what it said it would do either. Its was another lie. A "black box" stock picker. I will call it what is was. 100% pure ********. The biggest flim flam story since changing tin into gold was an idea. Lies and lies stacked on top of lies. And its a lesson about "insured financial advice". If the insurance is $4m and the claims are $30m everyone will lose. So any dodgy adviser will go big. Investors put $$ in and they lived off it. It was a ponzi scheme. New money was the fake earnings and when the new money stopped the reality that there was no assets kicked in. Just last year Mayfair Capital did the same. I heard the first radio ad and saw the scam but asic didnt. They promised security and high returns. I heard the ad and thought "unsecured debt".

    Pricks like this arent worth the air they steal

    I reckon a lender should also have a criminal onus to lose the loan if the investment is dodgy. If CBA etc lost all there money first such schemes would never start.

    It is sounds too good to be true...it probably is.
     
  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    Great Southern was an ASX 200 listed company with ATO approved tax deductibility.

    I think the government bears some responsibility for the farcical ponzi scheme it turned out to be.

    Where was the oversight to ensure that the deductions being granted were for something that was actually productive - which was kind of the point of these agri-business investments?
     
  8. Simon Hampel

    Simon Hampel Founder Staff Member

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    I think perhaps that is a bit harsh.

    The fund was based around a trading algorithm which simply gave instructions on when to buy and sell based on market movements.

    Steve demonstrated the trading algorithm to me in quite some detail - not many people got to see it actually in action (although some people did get to see an early version of it for testing purposes).

    The stock picking itself was done by the analysts inside the company based on their selection criteria.

    The trading system was "black box" but the stock picking itself was not.

    The fund did do what it was designed to do (generate high levels of income from trading) - right up until the point where the fund manager moved the funds to 100% cash (which it was actually permitted to do) on Steve's instructions to protect the FUM.

    If they hadn't done this, the highly leveraged financial planning investors would have been margin-called out of existence and the fund would have become unviable very quickly due to plummeting FUM. Damned if you do, damned if you don't.

    The house of cards was that the fund only existed in the first place through the highly leveraged investments of the NFS clients who were railroaded into it - take those investments away (because of margin calls) and the fund was never viable.

    What most people didn't realise though, is that Steve didn't actually invent that trading algorithm - he bought it, trading the algorithm for $1m in "shares" in his company (that Steve didn't pay for himself!), shares which ended up being worth zero to everyone except Steve who had already cashed out an investment he put pretty much zero dollars into. He certainly misrepresented that part of things - inferring that it was his invention. I met the guy who did invent it - lovely guy.
     
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  9. Momentum

    Momentum Well-Known Member

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    Interesting.. Steve always gave me the impression the algorithm was designed by him. I invested in his fund but luckily redeemed all my units before it collapsed. I think a lot of people on the SS forum were enticed to invest with him because he was active on there and gained the trust of many by making some good posts about property investing which made him look quite savvy.
     
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  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I went to see him around 2000. He chain smoked throughout the meeting and suggested I sell 8 properties - can't remember what he suggested I invest in. But luckily I didn't proceed any further, being put off by the smoking.

    But weren't some of these investments in 'plantations'. even back then these were seen as dodgy and people were losing money just for the tax benefits with ver few ever paying out on the capital gains.
     
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  11. Simon Hampel

    Simon Hampel Founder Staff Member

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    To be fair - the algorithm was no doubt refined by Steve over the years - but the original concept and design was definitely from someone else.

    But, like you - I was always under the impression that it was his idea.
     
  12. willair

    willair Well-Known Member Premium Member

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    I don't think it was investing in 'plantations',when i talked to Mr Navra in Brisbane a long time ago all he said was keep doing what i was doing and moved onto the next in line..
     
  13. skater

    skater Well-Known Member

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    Same! He told me all my investments were crap & I needed to sell them all & start again. He looked down his nose at me like I was a leper. I do recall something about plantations, but no detail.

    I'm so glad he did that, because I came away thinking some choice thoughts about him as well, and didn't put any money into his funds. I kept my 'crappy' investments & retired off of them instead.
     
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  14. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Cool aid was in the black box. Every conman who had peddled this mistruth has ended in tears and losses. Its fanciful.
    ASIC have a standing caution about all black box myths. eg horse racing, shares, stock picking, currency and more. Its like a "sullivan generator" and a perpetual motion machine. Or making unlimited hydrogen from a litre of water. ASIC are also now warning about pseudo scientific inventions concerning renewable energy fraud and virus transmission (eg Pete Evans lights, Firepower pills). If it sounds good it can attract gullible people.

    One of the few black box issues that works and it heavily concealed and used only by its owners is Optiver who have very high frequency trading models that work. But its used by them to make $$$ for them. Reasons its a black box there is to limit theft of intellectual property and to take opposing positions. ie betting against the firm.
     
  15. Simon Hampel

    Simon Hampel Founder Staff Member

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    Again - I think this is a bit harsh.

    This wasn't some system which promised to "beat the market" using some proprietary trading technique that nobody else had mastered.

    It was an income generating tool - the fund's goal was to produce income (to help service the debt created by Navra's highly leveraged strategy). It did exactly that for quite some time, generating significant amounts of income over several years (18%+ income paid out in one year if I remember correctly).

    There was a lot of debate at the time about whether the trading algorithm would continue to generate income in all market conditions or would simply erode capital instead (and do so in a non-tax efficient manner) - but alas, we were never able to test that due to the fund manager's decision to move to cash at a time when the fund should be theoretically producing its best results (the recovery phase from a market crash).

    Either way - most active fund managers have their "secret sauce" approach to how they select or trade stocks and indeed there are plenty of robo-trading systems out there active in the market. What you refer to as a "black box" is more often than not just a proprietary system as used in almost every industry. It's what makes intellectual capital valuable - the bits they do that they don't want other people to know about.

    You're making a lot of broad, sweeping statements in your posts, Paul - which I don't think is particularly constructive to the discussion. It would be far more useful to discuss the specific strategies employed and pull apart the pros and cons rather than to simply write everything off as the ravings of a mad-man.
     
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  16. Lacrim

    Lacrim Well-Known Member

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    I think the bottom line is this:

    You want to be rich (the safe way), then invest in yourself and by yourself. No financial planners, no gurus, no 3rd parties, no outsourcing.

    K.I.S.S - direct property and diversification in the sock market - blue chip stocks, long standing LICs and reputable ETFs.
     
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  17. hillsguy

    hillsguy Well-Known Member

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    Was there any money left after wrapping up ? I was an investor and never heard back from liquidators.
     
  18. Simon Hampel

    Simon Hampel Founder Staff Member

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    Nope - any money remaining would have been soaked up by the liquidators, especially since they were in control for more than 8 years while they finalised the winding up of the remaining managed investment schemes - taking their fees at every point along the way :rolleyes:
     
    Last edited: 21st Jun, 2021
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  19. Scott No Mates

    Scott No Mates Well-Known Member

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    Great business model.
     
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  20. See Change

    See Change Well-Known Member

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    We met Steve at “ the wife’s “ bbq in Canberra.?spent at least half an hour talking . SWMBO ( who seems to be a Scammer Whiperer…. ) was unimpressed. We went to one of his presentation . Two things stood out . It was complicated . I was struggling to understand it and I’m not dumb . The big one was him saying there are regular property value increases , which would enable you to refinance and use the additional funds for living .

    I asked him what would happen if prices didn’t go up or you couldn’t refinance . He said it would be “ a disaster but it will never happen “ . While that wasn’t the cause of his downfall, it did happen but the fact that he didnt see that as an realistic possibility was a deal breaker for me .

    cliff