Supreme Court proceedings have commenced against a South Australian managed investment scheme that left investors owing more than $7 million.
The Australian Securities and Investments Commission (ASIC) commenced proceedings in the Supreme Court in Adelaide against Jonathan Peter West of Athelstone, South Australia, and his company, John West & Associates Pty Ltd.
ASIC investigations revealed West or his company borrowed funds from investors at interest rates of up to 3 per cent a month and on-lent those funds to borrowers for commercial purposes. These investigations further revealed that the majority of these loans were now in default, with at least 54 investors being owed about $7.87 million.
ASIC alleged West and his company have been operating a managed investment scheme in breach of the Corporations Act since May 21, 2003.
ASIC applied for the appointment of John Irving and Andre Strazdins of Sims Partners to wind up the scheme and act as joint liquidators in the winding up of John West and Associates Pty Ltd. ASIC also applied for injunctions restraining West and his company from operating the managed investment scheme pending the appointment of Irving and Strazdins. This application has been adjourned for a directions hearing on April 4, 2007.
The court made orders restraining West and his company from operating the scheme except for the payment of interest and repayment of principals in respect of loans made pursuant to the scheme with the prior notification of ASIC. The court also ordered West and his company to report to ASIC on a weekly basis in relation to any transactions.
ASIC’s investigation is continuing.
