APRA bans 13 super fund trustees

The Australian Prudential Regulation Authority (APRA) has banned 13 individuals associated with the Victorian-based Wall and Ceiling Superannuation Fund from acting as trustees or responsible officers under the Superannuation (Supervision) Act 1993.

Head of enforcement, Darryl Roberts says APRA has made an example of those involved in the Walling and Ceiling Superannuation case, and adds it represents a text-book case of failing to meet in-house asset tests.

Roberts says that while not all trustees of the fund were closely involved with the breaches or necessarily had knowledge of them, all had been disqualified because of their failure to keep themselves fully and appropriately informed.

According to APRA the fund was a multi-employer fund managing some $3.2 million of assets on behalf of 133 members employed by approximately 16 firms operating in the building supplies industry.

APRA states it became concerned when inquiries as part of standard on-site review revealed the fund’s investment portfolio appeared to lack a prudent degree of diversification and liquidity and to involve significant conflicts of interest.

The resultant investigation revealed the fund’s assets were invested in a unit trust controlled by one of the trustee directors and that, in turn, that unit trust then funnelled members’ money into other unit trusts controlled by the same individual, which then developed factories, some of which were leased back to employer sponsors of the fund.

Roberts says APRA accepted an enforceable undertaking from the trustee that resulted in the sale of the property and certain measures to protect members entitlements.

He says that APRA’s action has succeeded in ensuring members of the fund ended up in a break-even position.