The Australian Securities and Investments Commission (ASIC) commenced Federal Court action to wind up Avestra Asset Management, over claims it breached its duties as an Australian Financial Services Licensee (AFSL).
ASIC reported that Avestra was the responsible entity or trustee of a number of managed investment schemes, with approximately $18.5 million under management.
The regulator alleged that Avestra has persistently contravened its duties in relation to a number of the schemes, including to:
- act in the best interests of scheme members;
- exercise the required degree of care and diligence; and
- do all things necessary to ensure that the financial services provided under its licence are provided efficiently, honestly and fairly.
Among other things, ASIC alleges that Avestra borrowed money on an unsecured basis from the property of its schemes, and invested scheme property in entities and offshore funds connected to its directors without proper due diligence or regard for the interests of members.
ASIC has sought interim orders to appoint provisional liquidators or receivers to take control of Avestra’s assets and report on, among other things, any suspected contraventions of the law, any losses suffered by scheme members, and whether the schemes ought to continue in operation (under a new responsible entity) or whether they should also be wound up.
The regulator said it was seeking final orders that Avestra be wound up on a just and equitable basis.
