The assets of three investment companies have been frozen by the Federal Court of Australia, following an investigation by the Australian Securities and Investments Commission (ASIC) surrounding the improper disclosure of publicly solicited funds.
Passed at the Federal Court of Australia at Melbourne yesterday, the ruling sees the assets of CME Capital Australia, Boston Pacific Capital Australia, and GKN Capital being frozen, after concerns were raised by ASIC that the three companies — none of which hold an Australian financial services licence—issued promissory notes in exchange for investments.
The companies, together with Boston Pacific Capital and IMCG will now be restrained from:
- removing any company property;
- selling, charging, mortgaging, dealing with, disposing of or diminishing the value of any company property;
- incurring new liabilities; and
- withdrawing, transferring, disposing of or dealing with any monies available to the companies
Under section 727 of the Corporations Act 2001, an offer of securities — which includes promissory notes — must not be made unless a disclosure document has been lodged with ASIC.
According to ASIC, an exception to this law is when the offer is made to a professional investor, as defined by section 9 of the Act, or has possession of or control over gross assets of $10 million.
Michael Petrou (the sole director of CME Capital Australia, Boston Pacific Capital Australia, Boston Pacific Capital, and GKN Capital) and Branislav Grujicic (the sole director of IMCG) were also ordered to surrender their passports to the court and be restrained from leaving Australia.
ASIC confirmed it sought the injunctions to protect investor funds while the investigation is continuing.
The matter has been listed for a further hearing on 10 December.
