Property coach and social media personality Ashley Binnie is under investigation by the government's Official Assignee and could be banned from running a business for up to ten years after two of his companies collapsed with debts of approximately $2 million.
The probe follows the liquidation of Binnie Boys Property Ltd and Smash Fixed Ltd late last year. Mr Binnie, who used his significant online presence to market coaching services and property flipping opportunities to investors, is now facing scrutiny over the management of the failed ventures.
The liquidations have left a long list of creditors out of pocket, highlighting the risks associated with the high-stakes strategy of flipping houses, particularly in a volatile property market. The investigation by the Official Assignee, a division of the Ministry of Business, Innovation and Employment (MBIE), will determine if Mr Binnie's conduct as a director warrants a ban under the Companies Act, following similar issues where Property coach Ashley Binnie faces business ban probe after $2m firm failures.
The company collapses
The first liquidator's report for Binnie Boys Property paints a grim picture. The company, which was placed into liquidation in October last year, owed a staggering $1.7 million to various creditors. In stark contrast, its assets were listed as just $21.50. The report also identified $21,000 in claims from employees.
A month later, in November, Mr Binnie's second company, Smash Fixed, also went into liquidation. It left behind a further $274,000 in debts, with the liquidator finding just over $15,000 in assets to recover. The combined shortfall from both companies approaches the $2 million mark.
Chris McCullagh of insolvency firm PKF was appointed as the liquidator for both entities. In his reports, he noted the companies were experiencing "significant financial difficulties" and were unable to pay their debts as they fell due, which prompted the liquidations.
Mr Binnie reportedly attributed the failure of Binnie Boys Property to several factors, including poor business advice and the impacts of the general economic downturn. He also cited a lack of personal guarantees from a creditor as a contributing factor, according to the liquidator's summary.
Investigation could lead to 10-year ban
Following the appointment of a liquidator, it is standard procedure for a report on the director's conduct to be filed with the Official Assignee. An MBIE spokesperson confirmed the office had received the liquidator's report concerning Mr Binnie and was now undertaking an investigation.
This process examines whether a director's actions. or inaction. contributed to the failure of the company. If mismanagement, recklessness, or other serious breaches of directorial duties are found, the Official Assignee can impose a ban that prohibits the individual from directing or promoting any company for a specified period.
According to the New Zealand Companies Office, these bans can last for up to 10 years and are intended to protect the public from directors who have a track record of corporate failure. The results of the investigation into Mr Binnie's conduct are not yet known.
The risks of property flipping
Mr Binnie's business model centred on property flipping, a strategy that involves buying a property, renovating it quickly, and selling it for a profit. Through his social media channels, he advertised his services as a flipper for investors and also sold coaching courses on how to succeed in property.
While potentially lucrative during a housing boom, flipping is a high-risk venture. It relies on a constantly rising market and the ability to accurately forecast renovation costs and complete the work on a tight schedule and budget. When the market cools or building costs escalate, flippers can be left with a property that is worth less than their total investment.
The recent economic downturn, characterised by soaring interest rates and a slump in house prices across New Zealand, has created a perilous environment for such strategies. This changing landscape has caught out many investors and property development companies who were banking on continued capital gains. Financial pressures have been felt across the region, from households facing new council charges to larger economic shifts, creating a challenging environment for many businesses, not just those in property speculation. Find out more about the financial pressures on Waikato residents in our story about new water charges.
Unregulated coaching industry
The situation also casts a spotlight on the unregulated nature of the property coaching industry in New Zealand. Unlike real estate agents, financial advisers, or lawyers, property coaches are not required to be licensed, have any specific qualifications, or adhere to a mandatory code of conduct. This lack of oversight leaves consumers and investors vulnerable to potentially poor or self-serving advice.
Anyone can position themselves as a property mentor or coach, regardless of their experience or success. They often use social media to build a following and market expensive courses, seminars, and personal mentoring sessions, promising to share the secrets of their success. Critics argue this can create a conflict of interest, where the primary business becomes selling expensive courses rather than delivering successful property outcomes for clients.
The investigation by the Official Assignee into Ashley Binnie's directorship is ongoing and an outcome is expected in due course.
