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. skater

    skater Well-Known Member

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    There were a number of deal breakers for me. We met him & the whole time he looked down his nose at us, due to our inferior investments (in his opinion). He said the only way forward was to sell the lot and start again.

    I am glad we didn't listen to him.
     
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  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    When we met him around 2001 he gave us a spreadsheet that simulated his trading strategy. I paper traded it for a few months, making significant (paper) losses. We didn't invest. There was a few other things that I didn't like about the strategy.

    I did like the theory of the trading strategy, but I just couldn't get it to actually work. Hence didn't invest.

    I've since come to the conclusion that investment strategies that rely on 'trading' tend to be higher risk and not something I'm comfortable with as an overall strategy. Regardless if it's property, shares or something else, I prefer a buy and hold strategy. I'll only commit to trading if it's money I'm willing to loose.
     
    Last edited: 21st Jun, 2021
  3. Piston_Broke

    Piston_Broke Well-Known Member

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    Can't believe this is still ongoing....

    Just because it was listed don't mean the govt has any responsibility for the actions of those running the company.

    From memory, Steve's company bought the trading algorithm from a company owned by Steve for $1 million. Then shares of that company were sold off on the basis that it would charge a management fee to the funds company....also run by steve.
    The so called algo did dollar cost trading. I'm pretty sure that was the term used
    To many people it's also known as grid trading and has been around for ever. Yet he convinced everyone he invented the wheel, and maybe even himself.
    I've seen many people convinced of their own BS that were gonna take over the world.
    Still hard to believe he got 400m in managed funds, pretty slick.

    Any decent trader with some experience knows how it works and how it goes.
    Those involved at the base of the operation were either inexperienced, dumb or frauds. Or all three.

    And what did he call his new company...CPA. Lmao, classic.

    Should'nt be too hard to work out. Same as what happens when the market falls.
    It's similar to selling puts and calls.
    As for it working for "quite some time" the numbers suggest other wise
    Navra Blue Chip Australian Share Retail - Managed fund profile - Managed funds - Eureka Report

    Anyways good luck with that.
     
  4. Simon Hampel

    Simon Hampel Founder Staff Member

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    Well, not any more - it's finally been wound up and can now finally be assigned to footnote status.

    It's not because Great Southern was listed that I made that assertion - it was because their plantation investments had official ATO approval as a tax scheme. The (apparently false) assumption there from many investors was that this meant it was legitimate and had ongoing monitoring for proper adherence to maintain it's status - and was not a giant ponzi scheme.

    Yes, when the proverbial hit the fan and all of this came to light - including the fact that Steve was NOT the inventor of the algorithm as had been asserted - there were a lot of his clients and investors who were rightly quite upset about this.

    Indeed, the additional fact that not a cent of his own money was used to purchase the algorithm (his first tranche shareholders paid for it) just made things worse.

    Agreed - the charisma and confidence can only come with the arrogance that believing in your own BS can bring.

    Not so much once you understand exactly where those FUM came from (and why the whole things was a massive house of cards). The FUM was mostly from his financial planning clients who were leveraged to the eyeballs against their existing investments to pour money into the funds.

    He also used margin loans to further gear up the money invested into the fund.

    He boasted in his "education" material about "leveraging the dollar six times" (which included getting rental income from IPs used to provide equity for the geared fund investments).

    When the bull-run music stopped and the banks started making margin calls - things started to unravel very quickly. It wouldn't have been such a problem but for the fact that the funds management company was only viable if people kept their funds invested and didn't have them sold out from under them by margin calls (or worse - if people pulled their investment completely).

    This is where the warrants came into play - by locking his clients into inflexible warrant products, he was able to secure their investment into the funds to keep the FUM from collapsing. Then the decision to move the fund to 100% cash during the GFC - despite the promise that this is the exact market conditions that would see the fund at its best - was final proof that it was all about protecting his FUM and never about his clients.

    The most telling thing (that only really became clear after the fact) was the "industry expert" who was employed by the funds management company to bring in institutional investment to the funds (and thus remove a lot of the leverage risk from the retail investors) - was paid very large sums of money and achieved exactly zero during his time there. I don't think it was incompetence on his part (he certainly had the experience and credentials) - I think he was being asked to sell something that was basically unsellable - the institutional investors saw right through the BS and declined to put any of their clients money at risk.

    The blue sky for the funds management company sold by Steve turned out to be nothing more than a painting on the ceiling.
     
  5. Handyandy

    Handyandy Well-Known Member

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    A news corp article dating back to 2016 pretty well summing up the total failure that Navra was.

    Investors pursue Steve Navra over $150m they claim still exists

    Also a submission to some enquiry of a personal account how this couple were bankrupted by their involvement with Navra

    "In2006, before being involved with Steve we had cash of $100,000, in a position to purchase our first home in Sydney. 8 years later my ex husband and I will both be bankrupt, owing almost $600,000 between us, completely as a result of the investment strategies advised to us by Steve Navra. Once bankrupt we (and our 7 year old daughter) will both lose our homes.We would then have to relocate either interstate or back to England –somewhere we could afford to rent, given we cannot earn more than $58,000 per year each as bankrupts. My daughter will have to move schools, lose her friends, as well as have two bankrupt parents."

    https://www.google.com/url?sa=t&rct...subId=302222&usg=AOvVaw0U7RAKX-V8GSmWyJBDuZDN
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Thats not technically correct. Product rulings dont approve a "scheme" and they certainly dont confer any approval to invest. They dont even "approve"...It merely recognises a arrangement / product fulfils the conditions set out in the ruling will have certain tax outcomes IF all those things occur. Which may give some understanding to deductions in most cases....But if the investment isnt as described whether the taxapayers knows or not its just worth nothing.

    Investors should always consider a product ruling as a concern rather than it being a form of permission by the ATO that something is certain. Promoters tell people it a binding ruling but its a binding as a post it note if its invalid or altered in any way shape or form. Sadly its a abused process and promoters misuse it and falsely represent its like a Canstar award.

    The ATO includes the following which many ignore

    No guarantee of commercial success
    The Commissioner does not sanction or guarantee this product. Further, the Commissioner gives no assurance that the product is commercially viable, that charges are reasonable, appropriate or represent industry norms, or that projected returns will be achieved or are reasonably based.

    Potential participants must form their own view about the commercial and financial viability of the product. The Commissioner recommends a financial (or other) adviser be consulted for such information.

    This Product Ruling provides certainty for potential participants by confirming that the tax benefits set out in the Ruling part of this document are available, provided that the scheme is carried out in accordance with the information we have been given, and have described below in the Scheme part of this document. If the scheme is not carried out as described, participants lose the protection of this Product Ruling.

    Terms of use of this Product Ruling
    This Product Ruling has been given on the basis that the entity(s) that applied for the Product Ruling, and their associates, will abide by strict terms of use. Any failure to comply with the terms of use may lead to the withdrawal of this Product Ruling.

    and

    Note to promoters and advisers

    Product Rulings were introduced for the purpose of providing certainty about tax consequences for entities in schemes such as this. In keeping with that intention the Commissioner suggests that promoters and advisers ensure that participants are fully informed of any legislative changes after the Product Ruling has issued.


    eg https://www.ato.gov.au/law/view/view.htm?docid="PRR/PR20204/NAT/ATO/00001"

     
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  7. Simon Hampel

    Simon Hampel Founder Staff Member

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    Yup - as you pointed out, many people are ignorant of how these things work - the public perception is that the ATO have approved it and are thus checking on these things - and promoters rely on that perception to infer a level of respectibility to their schemes.
     
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  8. Terry_w

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

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    There was a spruiker many years ago who claimed ASIC approval. It turned out that the company as registered with ASIC - like all companies. Henry was his name.
     
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  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Many tax schemes are marketed this way. A half decent tax agent can usually look at a scheme and say it looks "schemey" and provide some guidance. Most promoters also peddle the need for confidentiality and secrecy so others dont copy etc. Like they found the way to turn copper to gold. To me they are like the well known celb chef and his crackpot covid lamps. Expensive mistakes.

    Half a hour of independent advice can make a difference. Its cheaper.
     
  10. Redwing

    Redwing Well-Known Member

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    Tidying up some old documentation and found some old Navra material

    Navra 1.jpg

    Navra 2.jpg
     
  11. Perky29

    Perky29 Well-Known Member

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    Between 2004 and 2007ish it went great guns. I can remember one quarter where we made over 15k and bought an above ground pool.. then it all came crashing down......