Investment junket turns to flight of fantasy

LAST April, Brett Smith got a call from the Great Southern agriculture company, in which he had invested $400,000.

LAST April, Brett Smith got a call from the Great Southern agriculture company, in which he had invested $400,000.

The company was offering to fly the builder and his wife, Lynne, from their home town of Queanbeyan, NSW, to Western Australia, free of charge, to look at some new investments.

"My mum lives in WA, so I thought, 'here's a free trip'," Mr Smith, 54, said yesterday.

"There was no indication that the company was in trouble.

"There was a bunch of us (investors) on board and our accountant came with us. Great Southern paid for the whole thing. We went and looked at the tree plantations.

"A guy bounced out of a house on the property and was full of beans, saying what a great investment this was.

"They showed us a pile of woodchips. They showed us a new watering system, for the olives.

"The guy was talking about carbon credits, and about how they were going to use the bark and the waste that's left over from wood-chipping to make some kind of fuel. We had no reason to doubt these guys. It all looked kosher to me."

On the basis of what they saw on that trip, the Smiths agreed to put another $260,000 into Great Southern, bringing their total investment to about $680,000.

"We didn't expect to make any money for five years," Mr Smith said.

Now, it seems, the Smiths, who were planning to retire next year, may not make any money at all. The Great Southern company collapsed on Saturday, owing 43,000 investors, including the Smiths, more than $4 billion.

The company billed itself as an agricultural investment scheme. It bought up farm land, and replanted some of it with trees for woodchips, wine grapes, almonds and olives. Investors got significant tax breaks, which distorted the market.

Executives and financial planners got hefty salaries, and took fees, which lowered potential profits.

Mr Smith says he isn't sure what has happened to his money. He has thus far received just one email from his financial adviser, Empire Financial Planning, saying it's "difficult to say at this stage" what hope investors have of recouping funds.

Mr Smith isn't alone in wondering what the future holds. Scott Battersby, 31, has $75,000 at stake.

The engineer from Baldivis, south of Perth, and his wife, Sam, invested in Great Southern because of the 100 per cent tax offset.

Mr Battersby owns $45,000 worth of trees outright, with a $30,000 loan for others, being paid off over 10 years.

He has spoken to his adviser, who is "still of the opinion that we won't lose out because we own the trees", Mr Battersby said yesterday.

"All that will happen is that someone else will take over and manage the trees. I don't know how true that is."

He had intended to use money to take his sons, Chris, 13, and Jack, 9, to Disneyland.