Land banking scheme operators face liquidation
The Federal Court in Melbourne has appointed liquidators to developer companies, Bilkurra Investments and Foscari Holdings, following an application from the Australian Securities and Investments Commission (ASIC).
It came after the Court found that both companies knowingly participated in schemes that aided in the misappropriation of investors' funds. Furthermore, Michael Grochowski, who was banned by ASIC from providing financial services, had the day-to-day controls of the companies, including the control of the companies' bank accounts, which had investor funds.
Promoters of the land banking scheme used Bilkurra and Foscari to raise around $24 million from investors, and operated in similar ways to other land banking schemes such as the one associated with Jamie McIntyre and the 21st Century Group.
The two land banking schemes are known as Hermitage Bendigo (formerly Acacia Banks) located at Midland Highway and Foscari.
ASIC said the winding up orders were necessary in order for there to be any possibility of recovering lost money after a full investigation by liquidator, PPB.
ASIC warned investors that while promoters of land banking schemes offer access to lawyers and financial advice, they may not be independent enough to provide robust advice.
"These types of investments may constitute a managed investment scheme and/or a financial product. Developers and promoters should therefore hold an Australian financial service (AFS) licence and register these schemes with ASIC," ASIC said.
AUTHOR
Malavika Santhebennur
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