ASIC wins Opus Capital appeal
The Federal Court of Australia has overturned a decision by the Administrative Appeals Tribunal (AAT) which had earlier upheld an appeal from Opus Capital against the cancellation by the Australian Securities and Investments Commission (ASIC) of its Australian Financial Services Licence (AFSL).
Opus Capital is the responsible entity for 14 unlisted property funds, and originally had its AFSL cancelled by ASIC in August 2010 after the company failed to rectify an ongoing breach of the net tangible assets (NTA) condition of its licence to the Commission's satisfaction.
In September, Opus was successful in seeking to have the AAT set aside the cancellation of its licence, with ASIC then appealing that decision in the Federal Court in October.
The Federal Court has now ruled that the AAT erred in its opinion of tangible assets that comply with the NTA requirement of the AFSL held by Opus, ASIC stated.
"The Federal Court's decision reinforces the integrity of the financial requirements for AFS licensees that operate registered schemes," ASIC Chairman Greg Medcraft said in a statement.
"Deferred tax assets are not readily realisable or available should a licensee fail."
Earlier this year, Opus Capital's flagship Opus 21 fund was the subject of an attempted takeover by Century Funds Management (now Centuria Property Funds) with Century citing a number of concerns within the fund including a related party loan within the group of $17.3 million, which suffered a 90 per cent write down. Century failed to gain the 80 per cent of shareholder votes necessary to assume control of the fund.
The matter has been remitted back to the AAT to determine whether Opus' licence should be cancelled, and the AAT is now required to treat the deferred tax asset as excluded from Opus' NTA, ASIC stated.
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