Domacom, an ASX-listed platform for fractional property investments, has been suspended from raising new funds and facilitating secondary market transactions by the trustee of its flagship fund, MSC Trustees.
The suspension follows an article in The Australian Financial Review published earlier in July revealing capital losses faced by investors in properties tied to the National Disability Insurance Scheme due to tenant shortages.
The article, "Investors' hung out to dry' as NDIS housing schemes fail," detailed how ASR Wealth Advisers marketed government-backed returns to landlords of tenants with disabilities.
Due to oversupply and vacant properties, Domacom recommended winding up the funds.
Domacom's product disclosure statement, which was instrumental in raising approximately $200 million, has been temporarily withdrawn for new business.
The decision also includes the suspension of the secondary market for the fund.
Domacom, chaired by former Liberal leader John Hewson since April 2022, manages around $200 million across more than 100 funds, many of which are linked to NDIS properties.
Domacom's CEO, Steve James, expressed disappointment and noted efforts to enhance compliance and explore new business opportunities.
The company is working to improve its processes to resume accepting new investments as soon as possible while managing the impacts of the trustee-imposed restrictions.
DomaCom is an ASX-listed company engaged in the provision of investment management services and development of a platform to fractionalise assets.
The company offers a fractional investing campaign, which is a process that enables a group of property buyers with a common goal to invest in a specific property without committing to purchasing the entire property individually.