In 2009, two of Australia's largest agribusiness managed
investment schemes (MIS) failed—Timbercorp and Great Southern. In quick
succession, a number of other major schemes collapsed, including Willmott
Forests Ltd and Gunns Plantation Ltd.
Long after their downfall, the sad legacy of the failed schemes
For the purposes of this inquiry, the committee is concerned primarily
with retail investors caught up in these schemes, many of whom were first time
investors and not highly literate in financial matters. When the agribusiness schemes
collapsed, many investors lost not only their investment and prospects of
future income but were saddled with the burden of repaying the loans they took
out to fund their venture and the interest accruing on a now valueless asset.
Indeed, evidence before the committee is riddled with stories of the shattered
lives of people who invested, and borrowed to invest, in agribusiness
MIS—separation, broken relationships, lost life savings, bankruptcy, ruined health,
depression, self-harm and families placed under enormous stress.
The causes for this financial failure on such a large scale were
many and varied, and all participants in the industry must bear some
responsibility for it. They include: the product manufacturers and promoters; the
experts who rated the schemes; the financial advisers who recommended the
investments; the finance companies, credit assistance advisers and lenders that
facilitated and provided the loans; the regulators and governments for their
lack of decisive action in monitoring the marketing and performance of these
schemes; and retail investors enticed to enter into highly speculative ventures
on borrowed money.
In this report, the committee examines the role of all parties
involved in MIS, including those responsible for the policy and regulatory
framework in which the schemes flourished and withered, with the intention of
identifying measures that could be taken to help protect retail investors from any
similar financial debacle in the future.
Explanation—terms of reference
The terms of reference for the committee's inquiry clearly
specified that the committee was to inquire into the structure and development
of forestry managed investment schemes. Many of the people who made submissions
to the inquiry had invested in agribusiness managed investment schemes that
included both forestry and horticultural schemes. Furthermore, the two major
scheme operators—Timbercorp and Great Southern—were involved in ventures that
covered not only forestry managed investment schemes but more broadly
agricultural schemes such as olives, almonds, macadamias, stone fruit, citrus,
mangoes, avocadoes and table grapes. Because of this cross-over and the
similarities in complaints about the promotion and operation of these various
schemes, the committee resolved that it would receive submissions that dealt
with both forestry and horticultural schemes. They are known collectively as
agribusiness managed investment schemes (MIS).
Navigation: Previous Page | Contents | Next Page