On 20 October 2021, the Senate referred an inquiry into the Sterling Income Trust to the Senate Economics References Committee (committee) for inquiry and report by 1 December 2021. The committee was to give particular reference to:
the Australian Securities and Investments Commission's oversight of the Sterling Income Trust;
the need for legislative and regulatory reform to prevent such losses in the future;
access to justice and redress for victims of the Sterling Income Trust Collapse;
the novelty of the products of the Sterling Income Trust;
why the scheme collapsed and where the money went; and
On 29 November 2021, the Senate granted the committee an extension of time to report until 1 February 2022. On 1 February 2022, the committee presented a progress report requesting that the Senate grant an extension of time to report until 4 February 2022.
Conduct of the inquiry
In accordance with its usual practice, the committee advertised the inquiry on its website and wrote to relevant stakeholders and other interested parties inviting them to make written submissions by 8 November 2021.
The committee received 115 submissions, as well as additional information and answers to questions taken on notice, which are listed at Appendix 1.
The committee also received over 100 pieces of correspondence raising concerns about the Australian Securities and Investments Commission's (ASIC's) conduct in other matters not related to the Sterling Income Trust (SIT) or the Sterling Group more broadly.
The committee held three public hearings:
Canberra – Tuesday, 16 November 2021;
Canberra – Thursday, 18 November 2021; and
Canberra – Wednesday, 15 December 2021.
A list of witnesses who appeared at these hearings is available at Appendix 2.
Links to public submissions, Hansard transcripts of evidence and other information published by the committee for this inquiry are available on the committee's website.
References in this report to the Hansard transcripts for the public hearings are to the proof Hansard. Page numbers may vary between proof and official Hansard transcripts.
The committee thanks those individuals and organisations who contributed to this inquiry by preparing written submissions and giving evidence at public hearings.
The committee would especially like to thank those individuals who have worked tirelessly to create a voice for the victims of the Sterling Group collapse. The committee notes that the ongoing delays in accessing justice have endlessly frustrated these victims, who in some cases have sadly passed away without an adequate resolution.
Structure of this report
This report comprises four chapters, including this introductory chapter, with the remaining chapters set out as follows:
Chapter 2: provides background information on the collapse of the Sterling Group and the SIT, including the impact on tenants and investors.
Chapter 3: examines the various mechanisms of justice and redress for investors and tenants, as well as proposals to improve access to compensation for victims of the collapse.
Chapter 4: looks at the regulatory oversight of the SIT, including the actions of ASIC and whether improvements to the financial services regulatory regime are necessary.