Court freezes assets of $160m managed investment scheme entities
The Federal Court has ordered the freezing of assets and the appointment of receivers to two entities linked to Australian Fiduciaries, in the latest move in ASIC’s ongoing investigation into the company’s managed investment schemes.
Since February 2020, around 600 retail investors have invested an estimated $160 million into Australian Fiduciaries’ managed investment schemes, mostly through self-managed super funds (SMSFs).
Matthew Charles Hudson and Terry van der Velde of SV Partners were appointed as receivers of SRI Fiduciaries 2 and SRI Fiduciaries 3 on 4 September, with the Court simultaneously freezing the companies’ assets.
The appointments follow similar action taken on 2 September for six other related entities.
The receivers are tasked with investigating how investor funds were used and must report back to the Court within 45 days.
ASIC said the action reflects concerns over the recoverability of funds invested into these entities.
Australian Fiduciaries and its 30 related entities are now either in liquidation, subject to Court orders or undertakings to preserve assets, or under court-appointed receivers. The company ceased distributing units in the schemes in September 2023.
ASIC is investigating whether Australian Fiduciaries:
- Properly managed conflicts of interest.
- Appropriately sold units to investors and invested funds into related parties.
- Conducted regular valuations of its schemes.
- Maintained the value of the underlying assets.
The corporate regulator first announced that it had launched Federal Court proceedings to appoint receivers to Australian Fiduciaries and numerous related entities in June. This action heightened advisers’ concerns, given the potential for compensation through the CSLR.
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