When Madhuri Bakshi and her husband saw the ad for a new land release at Marsden Park in north-western Sydney, they knew it was the perfect site to build their dream home.
Bakshi chose her lot, worth $620,000, paid her 10 per cent deposit and stamp duty, and began making plans to build at what is known as the Clydesdale Estate in 2021.
Almost four years later she has been shocked to see her block, now with a new lot number, back on the market for $1.097m.
“We’ve been waiting to build a new house and we have lost so many opportunities because our deposit is here for four years,” she said.
“It was heartbreaking when I saw it was back on the market for half a million more. First of all I can’t believe it can happen. I’m just heartbroken. It’s a rip-off.”
Madhuri Bakshi has paid her deposit and waited almost four years for her land to be handed over. Credit: Rhett Wyman
Bakshi’s and 151 other families are now among a list of creditors owed a total of $9 million after a company collapse, subsequent sale of the estate – and a clause in the 44-page addendum to their contracts.
How the deal went south
Purchasers bought the blocks of land from Chinese-owned developer Boyuan Holdings Limited (BHL) and its sister company Cyan Stone, atop a web of holding companies. As the years passed, and property values boomed, the development was delayed and the lots never handed over to the purchasers.
Unbeknown to the purchasers, the entire development was sold by BHL to another company, Astro Fort, which was established in March this year by Mingqiang (John) Zheng. Zheng paid a $1 deposit on the $88.5 million deal – half of what the land is now worth.
Zheng was known to BHL and Cyan Stone, and lent them millions over the years through his boutique private lender Overseas Union Finance. He had lent Boyuan Real Estate Holding Pty Ltd, a subsidiary of BHL, $5 million in 2019.
At the heart of the deal is Ray White Capital, the investment arm of the Ray White real estate group. Ray White Capital funded some of the original loan to BHL, and (an investor pack shows) a subsequent loan to Astro Fort for $96.8 million has an expected return of 35 per cent for the same land.
RWC was founded by Dan White, now the managing director of the Ray White Group, in 2001 and has invested almost $5 billion in development projects since.
RWC told the Herald it lost $1.5 million on loans to BHL and Cyan Stone on the original Clydesdale Estate deal. These losses are not reflected in its investor pack.
It said the project had been a disaster for 3½ years, citing weather, cost overruns, COVID-19 and “the discovery of asbestos and waste contamination in the soil”.
Meantime, buyers like Bakshi have had to take up the fight in court. Last week, they lost an interim injunction when the Federal Court ruled the land could be put back on the market.
Justice Geoffrey Kennett, noting 44 pages of special conditions, plus attachments, to the sale contracts said: “What the applicants were agreeing to purchase was not a parcel of land that existed and could be conveyed to them, but a parcel that was to be created by an as yet unregistered plan of subdivision …”
Completion was subject to the registration of the subdivision, which has not occurred, and either party could rescind the contract prior to December 31 this year.
The judge also found any allegation of conspiracy lacked a sufficient evidentiary foundation.
The matter returns to court on Friday.
Purchasers said they had no idea their lots were being re-sold until online ads appeared. Bakshi said she “could never imagine” that this would occur. She says the cost of building her home has doubled in the meantime.
BHL has since been delisted from the stock exchange. The Cyan Stone companies have gone into liquidation. Among the unsecured creditors are the Clydesdale Estate purchasers and their $9 million worth of deposits.
Back at Marsden Park
Most of the road, street light, water and sewage infrastructure is complete.
Neighbouring parcels of land managed by developer Stocklands were sold after the Clydesdale blocks, and have been completed. Hundreds of families are living in homes there.
Premier Chris Minns has ordered the Department of Fair Trading to investigate the re-sale of blocks at Clydesdale “as a priority”.
In a statement, Fair Trading said: “The agency is investigating the real estate agents currently selling the lots.
“Selling the same lot to another buyer would breach the terms of an off-the-plan contract unless the original contract has been rescinded or terminated.”
Paul Dinsdale, who bought into the Clydesdale estate.Credit: A Current Affair
Paul Dinsdale and his wife bought a block at Clydesdale in 2020. Nearing retirement, they planned to build their “final” home there.
“The real estate has doubled in value and someone else has taken it. The real estate moguls are now deciding we can’t have it,” he said.
“Those family companies [Ray White Capital] should have some kind of loyalty to the families that have made their business by selling properties over these years and I think we should be given more consideration and more thought from these people.”
BHL and Cyan Stone have ignored repeated requests for comment. Numerous phone calls to Mingqiang (John) Zheng were not returned.
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