Lee Seng Huang, a prominent Malaysian businessman, has been implicated in an explosive financial scandal surrounding Aveo, Australia’s largest listed retirement village operator.

Lee’s family holds a 22.6% stake in Aveo worth $400m.  

A lengthy joint investigation conducted by ABC’s Four Corners and Fairfax Media claim to expose a long-running swindling racket by Aveo in its 89 retirement villages, which house a 13,000-strong population.

The three-part multimedia series, which also ran in the Sydney Morning Herald, showcased interviews with numerous elderly residents, their families, and legal representatives. These parties claim that Aveo’s glossy brochures and slick marketing misled investors into buying and later selling, or being forced to exit their homes in retirement villages, through dubious business practices. 

This resulted in great stress and significant financial losses, including converting buyers’ freehold premises into leasehold.

“This model to me is a ‘get-poor-quick scheme’ for the individual investor in a property or retirement village, and it’s a get-rich-quick scheme for the operator of the retirement village,” said former Aveo resident John Lander.

Lander, aged 72, was Australia’s first ambassador to Iran. He lost $78,000 after two years of investing in an Aveo home.

The extensive investigative report was also published by The Age, and included input from lawyers and consumer advocates, who alleged that Aveo was the “most aggressive listed operator in the country,” slapping a hefty 40% exit fee on residents who wanted out after two years as part of its tactic to generate a higher turnover of residents.

The Age further reported that Aveo, which has a market capital of $1.6bn, doubled its profits to $116m in 2016.

According to Malaysian newspaper The Star, Aveo’s majority shareholder is an Australian associate company of listed Malaysian conglomerate Mulpha International Berhad, which is 40% owned by the Lee family.

The Lee family owns extensive financial and real estate assets in southeast Asia, China, Hong Kong, and Europe. The family also owns ski and beach resorts, among other luxury properties in Australia, via Mulpha.

On Tuesday, Lee gave a phone interview to The Star and staunchly defended Aveo’s reputation.

“Aveo runs a very large and complex operation with more than 2,000 staff, across 89 villages, covering over 13,000 residents,” he said. “To take a few complaint cases and blow it out of proportion makes a great story but unfortunately, it is very unfair to our dedicated team that is doing the best it can in offering the highest levels of care to the Aveo residents.”

 

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