ASIC takes action in land banking scheme
The Federal Court has wound up five companies for their role in the operation of two land banking schemes following an investigation by the Australian Securities and Investments Commission (ASIC).
An ASIC investigation found that four project companies entered contracts for the purchase of Hermitage Bendigo and Veneziane, and a fifth company, Project Management Australia (PMA) entered into project management agreements with the companies.
The agreement required the companies to deposit all project revenues into bank accounts maintained by PMA, which enabled it to control all the companies’ finances.
ASIC sought orders to wind up the companies after its investigation raised concerns that the companies were insolvent and that over $15 million of investors’ money had been transferred between companies without concern for obligations owed to investors.
PMA was ordered to be wound up after it was found that it had intermingled funds and used them across the various land banking schemes and had maintained poor documentation.
ASIC Commissioner, John Price, said the corporate regulator would continue to take action against entities that run schemes where investor monies were put at risk.
“Investors should be very careful in ensuring that they understand the risks associated with land banking schemes and should ensure that they obtain independent legal and financial advice before making any such investments,” he said.
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