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The Association of Independently Owned Financial Planners (AIOFP) intends to hire a private investigator in Hong Kong to pursue people and companies associated with the missing $118 million from Astarra Asset Management’s Alpha Strategic Fund.
The AIOFP has six licensee members whose clients have money either trapped or lost in various Astarra funds.
Shawn Richard and Eugene Liu are the directors of Astarra Asset Management and were the managers of the Astarra Strategic Fund. AIOFP chief executive Peter Johnston met with Richard in Sydney last week to hear his views about the location of the funds.
Johnston said there was reason to believe the funds might be located through the pursuit of a man called Jack Flader, the chairman and chief executive of a company called Global Consultants and Services Limited. Johnston described Flader as a “long-time professional friend/mentor” of Richard, but said the two had not communicated since the outset of Australian regulatory interest in the funds.
Johnston believes Richard is innocent of any fraudulent behaviour in relation to the Astarra funds. Johnston said Richard “is now prepared to fully co-operate with ASIC and PPB to locate the [Astarra Strategic Fund] assets”. As such, Richard would send correspondence to PPB and the Australian Securities and Investments Commission (ASIC) outlining his knowledge of the location of the missing funds. PPB is the administrator of Trio Capital, which formerly traded as Astarra Capital.
Johnston, as advised by Richard, said while there is concern about the location of the $118 million invested in offshore hedge funds through the Alpha Strategic Fund, there remains about $320 million through a multi manager fund “held with [National Australia Trustees] out of Sydney with a host of local managers”.
The AIOFP’s relationship with Astarra goes back some years. The association’s website states it acted as a “consolidated distribution network to qualify for rebates from certain fund managers/platform operators for our members”. This included Astarra, along with Asgard, IOOF, Colonial, Netwealth and Wealthtrac.
Johnston said he had notified the ASIC and PPB of the AIOFP’s intentions to pursue its own line of enquiry through a specialist financial investigator.
Johnston said the costs incurred in any ongoing investigation would be paid via a levy on affected members.
ASIC and the Australian Prudential Regulation Authority jointly moved against Trio Capital, suspending its four superannuation funds and a pooled superannuation trust in December, having frozen the assets of the funds in October.
