Director guarantees to repay Seabay investors

The sole director of Seabay Investments has personally guaranteed to repay a percentage of debts totalling around $18 million to 50 investors.

Seabay Investments director Carmine Misale agreed to guarantee the repayment of 20 per cent of money owed to investors by March 1, 2009, in return for the investors forgiving the debt under deeds of compromise and forgiveness of debt they entered after the Australian Securities and Investments Commission (ASIC) moved to wind up the company to recover the funds.

ASIC was taking action against Seabay as part of action against Adelaide man Guiseppe Antonio Mercorella, who had been operating an illegal scheme that allegedly owed at least 78 investors $56 million and is currently being wound up.

An ASIC investigation revealed that between about April 2003 and April 2005, Seabay entered into loan facility agreements with investors, most of whom live in South Australia. Money raised was then on-lent to Mercorella’s illegal scheme.

The Federal Court of Australia in Adelaide declared that Seabay had issued debentures in breach of the fundraising and debenture provisions of the Corporations Act 2001.

ASIC had sought orders to have the company wound up, but accepted Misale’s personal guarantee to repay the percentage of funds that Seabay and its investors had agreed to.

“ASIC has sought to improve the prospects of a return to investors by obtaining the director’s personal guarantee that investors will be paid,” ASIC’s deputy executive director enforcement Allen Turton said.

ASIC recently referred information relating to suspected criminal breaches of the Corporations Act to the Commonwealth Director of Public Prosecutions and is continuing investigations.