Rural Funds Group accused of running a Ponzi scheme

Rural Funds Group accused of running a Ponzi scheme
Rural Funds Group accused of running a Ponzi scheme

Units in agricultural property trust Rural Funds Group fell last week, after the circulation of another critical report.

A Hong Kong-based report accused the RFG manager, Rural Funds Management, of running a Ponzi scheme.

The damning report, by advisory firm Bucephalus Research, followed the activist short-seller Bonitas Research's earlier attack on Rural Funds Group and its manager Rural Funds Management.

RFF units fell 12% on Thursday, closing at $1.71, then dropping to $1.62 on Friday, and back to $1.70 in Monday trade.

They were trading at $2.35 before the Bonitas report was released on August 6.

RFM advised the fresh report had similar claims to the earlier report.

Rural Funds Management says Bonitas' allegations have been "slavishly repeated by Bucephalus".

It is not ruling out legal action.

RFM is already suing Bonitas in the NSW Supreme Court.

It owns around $1 billion worth of farms, including cattle stations, feedlots, almond and macadamia orchards and water rights.

Bucephalus and Bonitas believe the assets are overvalued, enabling RFM to collect higher fees.

RFM collected $8.5 million in management fees in the 2019 financial year, up from $6.3 million in the prior year, the Australian Financial Review reported.

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Rural Funds Group Ponzi Scheme

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