LUX Insider: Debt-Free Balance Sheet Shielded Marina Bay City From Multi-Million Dollar Fallout
A Lux Property Group insider has confirmed it was fortunate the group operates debt-free, after being forced to rely entirely on the strength of its own balance sheet to absorb significant losses following the buyout of Kinnara from the Marina Bay City project in Lombok.
According to the spokesperson, a forensic audit conducted after the buyout uncovered that millions of dollars in client funds had been diverted to Kinnara-controlled entities, while construction payments for many villas were never passed on—despite clients having paid under inflated sales contracts.
Sales Claims Collapse Under Audit
Kinnara had repeatedly claimed it generated sales at a ratio of six-to-one over LUX. That claim has now been discredited.
“The audit shows only 5% to at most 10–15% of total project sales can be legitimately attributed to Kinnara,” the LUX spokesperson said.
“The vast majority—between 85% and 95%—were LUX clients.”
The audit further indicates that LUX client leads were systematically diverted, contracts were altered, and client funds were redirected into Kinnara-controlled accounts without authority. As a result, villas for many affected buyers were left unfunded and unbuilt, despite payments having been made.
“Spending Like a Drunken Sailor”
The insider said forensic accountants were forced to intervene after identifying uncontrolled and unjustified spending.
“They were effectively spending LUX’s money, while contributing very little of their own. Once it became clear that up to 95% of the capital in the joint venture was attributable to LUX, the situation became untenable.”
The intervention halted further losses and triggered the buyout—an outcome the spokesperson says was necessary to protect the project and remaining investors.
Builder Losses Compound the Damage
The fallout extended beyond sales diversion. LUX also suffered substantial losses from two builders introduced by Kinnara:
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Builder One was terminated across three Bali projects after allegedly fraudulently overcharging, issuing false progress reports, and then refusing to complete contracted works—despite having received AUD $1.2 million upfront.
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Builder Two was paid AUD $400,000 in advance and has, to date, failed to complete the majority of the work contracted.
LUX says evidence now suggests Kinnara may have been connected to at least one of these builders, including funding litigation against LUX in what the company describes as an attempt to extort further funds.
Asset Freezes and Digital Asset Recovery
LUX confirmed its legal team is preparing court action to:
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Freeze Kinnara-controlled assets holding investor funds, ensuring money is preserved for villa construction
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Recover funds allegedly used to purchase land in and around the Marina Bay City precinct after the buyout, using client money
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Compel the return of digital assets, including project websites and platforms that Kinnara has failed to hand over, despite clear buyout obligations
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Prevent ongoing misrepresentation, sales activity, or use of Marina Bay City branding by parties with no ownership or authority
“These steps are about protecting investors and ensuring homes get built,” the spokesperson said.
“We will not allow diverted funds, digital deception, or asset misuse to continue.”
A Project Stabilised—At a Cost
While LUX says Marina Bay City is now stabilised under sole control, the spokesperson acknowledged the financial and operational toll of rectifying the situation.
“If LUX had been highly leveraged, this could have collapsed the project. Being debt-free is what allowed us to step in, clean up the mess, and keep building.”
LUX reiterated it will only construct villas that are properly funded and will continue pursuing all legal avenues to recover diverted funds and hold responsible parties to account.
Note
This article reflects statements from a LUX spokesperson and information obtained through internal audits and ongoing legal proceedings.