South Australia dealer group Financial Planning & Life (FP&L) has gone into voluntary liquidation, partly as a result of a fraud perpetrated by one of its authorised representatives.
Matthew Leech was charged by the Australian Securities and Investments Commission (ASIC) and found guilty of the theft of $1.3 million from FP&L between July 1998 and November 2005.
The dealer group had 24 member planning firms, mainly in NSW, Victoria, and South Australia prior to its liquidation last month.
In documents before ASIC, liquidator Hamish Mackinnon of chartered accountants Bent & Cougle said a resolution had been taken at a meeting on July 16 to wind up FP&L voluntarily in accordance with the Corporations Act 2001.
FP&L director Stephen Heald said in documents that the decision of the directors to wind up FP&L was due to the “professional indemnity insurer denying liability due to false representation (by Leech) about committing frauds and, therefore, all entities were not insured”.
Heald said the dealer group had subsequently “sought Queens Counsel advice and that this advice was that the insurer may have a strong argument”, adding that as a result of Leech’s fraud, it would have been difficult to obtain any further PI cover.
He also signed documents summarising the dealer group’s assets and liabilities, which stated that FP&L had a “surplus of $5,041.50”.
However, liquidator Mackinnon explained in other documents that FP&L had “16 contingent liabilities whose claims could be substantially more than the amount listed (by Heald)”.
Heald and Geoffrey O’Neill were sole directors of the company, which was incorporated in 1996, each holding 188,000 ordinary shares.
O’Neill is currently a director of advice and accountancy firm AdvantageOne, which was previously a member of FP&L.
