Sovereign to wind up fund after ASIC steps in
The Australian Securities and Investments Commission (ASIC) has intervened in Sovereign Capital’s intention to wind up the Sovereign Prudential Fund, due to concerns the Gold Coast-based construction lending business is not the appropriate entity to do so.
Sovereign had sought a court application to wind up the fund because its professional indemnity insurance was not being renewed.
However, ASIC, which had commenced administrative action to have Sovereign’s Australian Financial Services licence revoked or suspended due to compliance breaches, intervened in the application, seeking the appointment of an independent liquidator.
Rather than appointing a liquidator, the court ordered that Sovereign be permitted to wind up the fund under the supervision of William Fletcher of Bentleys MRI, who will act as a supervising accountant.
Sovereign must also provide a monthly report to Fletcher and ASIC detailing the progress of the realisation of investments in which members’ funds have been invested, a list of all receipts and payments made by Sovereign in the preceding month, and a copy of settlement statements on the sale of any real property assets of the fund.
The Sovereign Prudential Fund is involved in lending money to property developers in NSW, Victoria and Queensland, and has $54 million invested on behalf of 700 investors.
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