Melbourne cafe supremo Rashid Alshakshir is, in many ways, the epitome of a small business success story.
The one-time aspiring journalist and student filmmaker pivoted several years ago into marketing and hospitality, and is now the co-owner of the newly opened, trendy Tickled Pink cafe in Canngu, Bali, building on the brand’s outlets in Thornbury, Elwood and Richmond.
More recently, Alshakshir has been involved in a far more lucrative business, earning $35 million in 18 months providing investment “leads” to property developer and fund manager Paul Chiodo.
Rashid Alshakshir, Paul Chiodo and the branding for the Tickled Pink cafes.Credit: Monique Westerman
Until June, Chiodo had overseen the massive $480 million Shield Master Fund managed investment scheme and the Keystone Asset Management investment house, as well as a development pipeline of exclusive, five-star resorts worth $1 billion in places such as Port Douglas, Fiji and Venice.
Alshakshir’s side hustle with Chiodo appears to have been stymied by an investigation by the corporate watchdog into the affairs of Chiodo and the investments of the Shield Master Fund, which is now frozen, trapping the life savings of 6000 Australians.
Part of the regulator’s probe includes reviewing the relationship between Chiodo and the cafe owner and the other 16 or so lead generators who were paid $65 million in total – or 13 per cent of the money raised from investors – for marketing services.
An investigation by this masthead in early August revealed concerns at the Australian Securities and Investments Commission that a large proportion of the Shield Master Fund’s money had been improperly directed to another fund that then solely provided loans and mortgages to Chiodo’s property development business.
ASIC alleges these investments may have been out of step with the fund’s stated investment intentions given it appears investors had believed they were investing in shares in listed companies and in a diversified portfolio of property developments and secured loans.
This masthead also uncovered that several of the Chiodo developments invested in by the fund were for ambitious five-star hotel projects that had no planning approval and faced lengthy delays compared to the completion times touted in promotional material. This included $140 million of investor money being advanced to a property development in Port Douglas, which had no planning approval.
It has since emerged that the fund, via its Quantum PE sub-fund, had invested in the Tickled Pink cafe business – which is owned by the man who was generating leads for new investors into the Chiodo investment empire.
Chiodo has long described ASIC’s probe as unfair and “precipitous”, noting it had a disastrous impact on investors in the fund despite his efforts to work constructively with ASIC and receivers to his business.
ASIC has made no formal charges against Chiodo and there is a chance the corporate watchdog’s investigation may result in no action being taken against the once high-flying property developer and fund manager who tried in vain to rescue the Shield Master Fund from entering administration before liquidators were appointed.
There is also no suggestion that Alshakshir, who runs Bespoke Marketing, the business headquartered in Sydney Road, Coburg, as well as the cafes, has any involvement in the Shield Master Fund or Chiodo’s development business.
The payments to Alshakshir’s business are, however, of interest to ASIC and to liquidators from Deloitte, Jason Tracy and Luci Palaghia, who are reviewing whether they can claw back the payments for the investors in the fund.
The interior of the Tickled Pink cafe in Elwood before its closure in November. Credit: Instagram
ASIC highlighted the relationship between one of Chiodo’s entities and Alshakshir’s business, NOHAP, in court documents filed by the regulator when obtaining freezing orders over Chiodo’s assets this year.
“ASIC suspects that Keystone has been paying commissions to lead generators engaged to assist Keystone in promoting investments in the SMF [Shield Master Fund]. ASIC is particularly concerned with certain payments made to NOHAP,” the regulator said in the documents.
Commission payments to financial advisers for product recommendations are banned in Australia under laws put in place to stamp out conflicted remuneration. However, payments for marketing services are permitted. There is also no suggestion that Keystone paid any commissions to financial advisers.
ASIC acknowledged in its court documents that Keystone and related group CF Capital maintained a policy that explicitly stated that neither ever paid commissions for financial advice in explaining the relationship between Alshakshir and Chiodo.
“The agreement [between NOHAP and Chiodo Corporation Operations] variously provided that NOHAP would provide Chiodo Operations with services variously involving the identification and encouragement of ‘potential clients’ (expressly not involving the provision of advice),” ASIC said in its court filing.
“NOHAP was to be paid significant fees and commissions as to any resulting person who invested in any financial product promoted, offered or managed by Chiodo Operations or a related entity of Chiodo Operations (including any fund).”
An artist’s impression of the Fiji resort being planned by Chiodo Corporation.Credit: Instagram
Chiodo, when approached by this masthead for comment, said the payments were entirely above board and common in the industry.
“Every fund undertakes marketing including the industry super funds via media, sporting sponsorships, radio and social media. There is nothing unusual about funds paying for marketing to gain more investors. The benefits to members are obvious as validated by large funds also using these forms of marketing strategies,” he said.
Chiodo said that successful marketing resulted in leads for the business, and called it “marketing 101”.
“The leads came from marketing consultants, which was approved expenditure by Keystone. Chiodo Corporation acted on instructions by Keystone to enter into contracts and to make marketing payments under the direction of Keystone,” he said.
“Keystone engaged specialised marketing consultants under a fee-for-service arrangement that exists in this marketplace [which] provides these services a wide range of fund managers including the large industry funds.”
Chiodo added that Alshakshir’s business was used by other leading fund managers for marketing to generate leads on prospective clients, and that doing so was common in the industry.
Keystone’s other marketing activities also included paying $700,000 in corporate event appearance fees to big-name NBA players Allen Iverson and Josh Giddey, and boxers Tyson Fury and Floyd Mayweather Jr.
Rashid Alshakshir’s Bespoke Marketing business in Sydney Road, Coburg.Credit: Luis Enrique Ascui
It’s not clear if Alshakshir was involved in those corporate events. But he does have a strong marketing background and an interest in marketing for financial services, which appears to have blossomed in the past two years.
This includes three websites focused on helping Australians better plan for their retirement, according to company documents and searches of website ownership databases.
Two of the websites – Superfinder.au and Australianlostsuper.com.au – help Australians find and consolidate their lost superannuation. Another, mysmsfaustralia.com.au, educates people about the benefits of self-managed superannuation.
The websites, which listed a business email address associated with Alshakshir, were all closed on December 18, following an inquiry from this masthead to Alshakshir to that email address the previous day. Alshakshir did not respond to the inquiry.
There is no suggestion the sites were tied to Chiodo’s business or were conducting any work that was not in line with the law, just that they show Alshakshir’s burgeoning interest in marketing services that help Australians save for their retirement. Before being shuttered, all the sites made it clear there is no provision of financial advice, which requires a licence.
Instead, the two lost super sites offered a call line, and the self-managed superannuation business said it was only “connecting you with licensed financial planners and advisers for super and other personal investment advice”.
The Australian Lost Super website before it was closed following an inquiry from his masthead on December 17.
The website closure isn’t the only part of Alshakshir’s business that is in wind-down mode.
In November, he and his business partners hung up closed signs at the Tickled Pink cafe outlets in Thornbury, Elwood and Richmond. The cafe in Canngu is also in hiatus, according to a post on its Instagram page which reads: “We are temporarily closed. And working on something exciting. Stay tuned.”
Asked about the Tickled Pink business, including the closure of the Melbourne venues, Chiodo said: “Tickled Pink had three thriving businesses in Melbourne and their international strategy in Bali made for it to be a good investment. Tickled Pink upon completing the Bali restaurant fitout delivered a $15 million valuation.
“I understand that that Bali business is still thriving, and they are about to complete the fitout of their second restaurant in Bali, which will only improve the valuation.”
Hopefully for investors, that valuation uplift proves true.
Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.