Licence cancelled for Banksia Financial Group subsidiary
The Australian Securities and Investments Commission (ASIC) has cancelled the licence of one of the subsidiaries of the collapsed Banksia Financial Group.
In a request made to the regulator, Banksia Mortgages asked for its Australian Financial Services Licence (AFSL) to be cancelled in a bid to reduce ongoing costs to investors and to transfer funds to Banksia Securities. ASIC stated the licence had been maintained for the purposes of liquidity requirements under its AFSL.
Banksia Financial Group, had four subsidiaries at the time of its collapse in 2012 - Banksia Mortgages Limited, Banksia Securities Limited, Cherry Fund Limited and BFG Management Pty Limited.
Banksia Mortgages was ordered by the Supreme Court of Victoria in August 2013 to wind up the Banksia Mortgage Fund with a sale of the fund's portfolio of loans in December 2013 resulting in $85 million being distributed to 1,200 investors.
Earlier this month Banksia Mortgages applied to ASIC to cancel its AFSL and while the regulator has cancelled the licence it will continue, in effect, for the limited purpose of allowing Banksia Mortgages to wind up Banksia Mortgage Fund.
ASIC stated that most investors in the fund have received back 100 per cent of their funds plus interest with about 100 investors yet to receive all of their funds. Investors in Banksia Securities, which had been financially supporting Banksia Mortgages, have so far received 80 cents in the dollar.
Despite the cancellation of the licence ASIC stated that its' investigation into the failure of Banksia Financial Group was continuing.
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