Liquidators have been appointed to Empower Invest and Newcastle Palais Holdings – two companies that operated an unregistered managed investment scheme – after the companies failed to refund money to investors as part of their enforceable undertaking.
According to an Australian Securities and Investments Commission (ASIC) investigation, the directors of the two companies, Kenneth Watson and Brien Cornwell, extracted $769,500 from 10 investors as part of the scheme linked to a Newcastle property development – with more offers being made to a larger number of people.
The Supreme Court of New South Wales declared in May 2008 that Watson and Cornwell promoted and operated a scheme linked to a Newcastle property development, without registration and without holding an Australian Financial Services Licence (AFSL).
Following the Court’s declaration, ASIC accepted enforceable undertakings (EUs) from the defendants in which they undertook to inform investors in the scheme of the regulator’s concerns, offer to refund money invested and report any refunds paid to ASIC.
While the defendants complied in part with their undertaking, they failed to repay investors in accordance with the terms of the EU.
“As a result of the companies’ continued failure to repay the investors, ASIC initiated proceedings to wind up the companies on 23 December, 2010,” the regulator stated.
