Lion Property Group collapses as investors chase their money

An award-winning Melbourne artist is among dozens of devastated investors owed up to $120m in what is described as a “giant Ponzi scheme”.

An award-winning Melbourne artist is among dozens of devastated investors owed up to $120m in what is described as a “giant Ponzi scheme”.

Adrian Doyle’s plan to take his art overseas was so well advanced that he had bought land and appointed an architect.

He even learnt to read and write Thai in anticipation of opening an art gallery in the southeast Asian country and decided to invest $400,000 in Lion Property Group — a Melbourne real estate developer that builds luxury homes — which later collapsed, leaving investors millions of dollars out of pocket.

Mr Doyle joined 26 other investors from across the country who poured close to $120m into property development projects in Melbourne and other states in what their lawyer described in the Supreme Court as a “giant Ponzi scheme”.

This claim is strongly denied by Lion directors Garry Pesochinsky and John Sader.

Prominent Melbourne artist Adrian Doyle invested with Lion Property Group to open an art gallery in Thailand but those plans are up in the air. Picture: Jason Edwards

Earlier this month the court placed Lion, along with 27 related companies, into provisional liquidation after investors took legal action to recoup their money.

Mr Doyle, who runs the award-winning Blender Studios in Melbourne, said a new art gallery in Thailand had to be shelved without the money he invested in Lion.

“I have worked a lifetime to create my art retreat. And that is heartbreaking. I worked so hard for that money,” he told the Herald Sun.

“I have run Blender my whole adult life and have been thinking of the future and how I can continue the great work that Blender does in a different context”.

Lion Property Group directors Garry Pesochinsky and John Sader.

Mr Doyle said community workshops, a street art festival, working with local schools, youth centres, and orphanages were also part of his vision in Thailand.

While waiting for the green light from Thai authorities, he decided to put funding for the project into an investment and found Lion.

“Their pitch was compelling. Some mum and dad investors and some heavy hitters that have invested millions. It all looked legitimate. They advertised a projected annual return of 12 per cent,” he said.

“But it wasn’t. So here I am, asking: Where is the justice? Who will help? Where is my money?

“It’s a horrible situation that has isolated many people. For many of us investors it’s also embarrassing to admit that we were stupid enough to fall for it”.

Some of the investors that put in millions of dollars into Lion Property Group investment.

Despite the loss, Mr Doyle said he still went to Blender Studios each day to make art.

According to court documents, only $35m of the $120m investor funds could be verified as being paid towards development projects, many of which remained unfinished. Some were never started.

Lion returned to court on Friday and the matter was adjourned to August 1 to allow parties, including Mr Pesochinsky and Mr Sader, to read the report of provisional liquidator Emily Seeckts.

Mike Landy of Eagle Financial Solutions investigated the investment scheme on behalf of the investors and was also in court to support them on Friday.

The investors’ lawyer David Mence sought interim orders to prevent Lion directors from channelling money out of the company while the case is still before the court.

That undertaking was given and Justice Patricia Matthews cautioned Mr Pesochinsky and Mr Sader that any breach could amount to contempt of court.