Dixon Advisory & Superannuation Services preys on granny investors using a suite of scam investments that pay returns out of capital raisings. The Asian Masters Fund (AUF.AX) pays dividends and performs buybacks out of share issues, using the yield to attract more granny investors to issue shares to. The AUF share price has been ramped significantly above asset backing despite the company's perennial losses, rapacious management fees and heavily negative operational cashflow. In 2013 AUF had negative operational cashflow of $1.6m, down from negative $1.5m in 2012, yet paid out $2m in dividends and $24m in buybacks. This was made possible by issuing $28m worth of shares in 2012 (and even more shares in 2011). The operators of this ponzi scheme netted a cut of around $4m over the last two years, money stolen from granny investors, as shown in its annual report.
Next, AUF will issue shares at the artificial price, marketing its fraudulent returns with ASIC's blessing. Dixon operates this scam under the protection of ASIC. Since ASIC has given its approval to the scam, no financial adviser could be faulted for recommending it, no journalist could be scolded for shilling it, and the criminals are in effect untouchable.