A prominent Auckland property coach and social media influencer, Ashley Binnie, is being investigated by the Official Assignee and could be banned from running a company for up to a decade after two of his businesses failed with debts exceeding $2 million.
Mr Binnie cultivated a significant online presence, using social media platforms to promote his property investment coaching courses and his services as a property "flipper" for aspiring investors. His companies, Binnie Boys Limited and Renovate to Profit Limited, were both placed into liquidation last year, triggering the current investigation.
The probe by the Official Assignee, which operates under New Zealand's Insolvency and Trustee Service, is a serious development that could have significant ramifications for Mr Binnie’s career. The investigation will scrutinise the circumstances leading to the companies' failures and determine if his conduct as a director warrants a prohibition from managing, directing, or promoting any company in the future.
High-profile collapse under scrutiny
Through platforms like social media, Mr Binnie marketed an appealing vision of wealth creation through property. He offered expensive coaching programmes and a "done-for-you" service where his team would find, renovate, and sell properties on behalf of investors, a practice commonly known as flipping. This model relies on purchasing properties, adding value through renovations, and quickly selling them for a profit in a rising market.
However, for this strategy to succeed, numerous factors must align, including accurate budget management, timely completion of renovations, and a buoyant property market to absorb the renovated homes at a premium. The collapse of Binnie Boys and Renovate to Profit suggests a significant breakdown in this business model, leaving a trail of substantial debt.
Liquidators' reports filed for the two companies have revealed the extent of the financial shortfall, with more than $2 million owed to various creditors. These creditors can include everyone from contractors and suppliers who worked on the renovations to clients who paid for services and courses that were not delivered.
The situation serves as a stark reminder of the inherent risks in the high-stakes world of property flipping, an investment strategy often glamorised online but fraught with potential financial peril. For investors who entrusted their capital to Mr Binnie’s ventures, the liquidations represent a significant financial loss and a cautionary tale about the fast-paced property investment sector.
The role of the official assignee
When a company goes into liquidation in New Zealand, the directors' conduct is automatically subject to review. If the company's failure results in significant losses to creditors, the Official Assignee may launch a formal investigation, as it has in Mr Binnie's case. This body has a mandate to uphold the integrity of the business environment and protect the public from reckless or irresponsible company directors.
According to the Insolvency and Trustee Service, the investigation will examine whether a director has failed in their duties as outlined in the Companies Act 1993. This can include reckless trading, failing to keep proper accounting records, or incurring obligations without a reasonable belief that the company could meet them. The process is designed to hold directors accountable for their management of a company.
If the Official Assignee finds evidence of gross mismanagement or other breaches of directorial duties, it can seek to have that person prohibited from acting as a director or being involved in the management of a company for a period of up to 10 years. This power, enacted under the Companies Act, is one of the most severe civil penalties that can be imposed on a director in New Zealand.
This regulatory oversight is crucial in sectors like property investment and coaching, which remain largely unregulated. Unlike licensed real estate agents or financial advisers, property coaches are not subject to a specific statutory code of conduct, creating a potential minefield for inexperienced investors looking for guidance in a complex market like Auckland's best suburbs.
An unregulated industry
The property coaching industry in New Zealand has expanded rapidly, fuelled by a combination of a rising property market over the past decade and the power of social media marketing. Coaches often leverage their own success stories to sell high-priced seminars, online courses, and personal mentorships, promising to share the secrets of their success.
While many individuals have likely benefited from sound advice, the lack of regulation or a formal barrier to entry means the quality and reliability of advice can vary dramatically. Critics point out that strategies that work in a booming market can lead to financial disaster when market conditions change, interest rates rise, or unforeseen renovation costs spiral out of control.
The failure of Mr Binnie’s companies highlights the potential vulnerability of clients who place their trust and capital in the hands of these influencers. The losses incurred by his creditors and investors underscore the importance of due diligence and the need for consumers to be sceptical of promises of guaranteed high returns.
The ongoing investigation into Ashley Binnie will be closely watched by the property investment community and regulators alike. Its outcome may fuel further calls for greater oversight of the property coaching sector to protect consumers from potentially unqualified or reckless operators.
What happens next
The Official Assignee's investigation is a meticulous process that can take many months to complete. Investigators will review all company records, financial statements, and correspondence, and may interview Mr Binnie, employees, creditors, and clients to build a complete picture of the companies' operations and subsequent failure.
If the investigation concludes that Mr Binnie’s actions as a director justify a ban, the Official Assignee will formally seek the prohibition. Mr Binnie would have the right to respond and present his case before a final decision is made. This process ensures that any such restriction is applied fairly and based on a thorough examination of the facts.
For now, the future of Ashley Binnie’s career in the property industry hangs in the balance. The ongoing investigation means he is one step closer to potentially being barred from any directorial role, a move that would effectively end his ability to manage or promote a similar business in New Zealand for the duration of the ban.
