Storm Financial founders, clients in pre-emptive money grab
The creditors of Storm Financial are meeting in Brisbane this morning, but the outlook for the group’s former employees and creditors is not good.
The Commonwealth Bank of Australia (CBA), Storm’s major creditor, has appointed KordaMentha as receivers to the group, which closed its doors last week following the removal of the bank’s financial support and in the midst of significant financial losses from clients.
There are already reported concerns that the group’s 115 employees, who were sacked by the administrators, will not have their interests met, leaving little hope CBA will be able to salvage the $30 million owed to it.
Media reports have quoted KordaMentha’s Rob Hutson saying “a substantial amount of cash” was taken out of Storm in non-trading payments late last year. Reports state $2 million was paid to Storm founders Emmanuel and Julie Cassimatis as a dividend while a further $650,000 was paid to four clients of Storm, with these payments recorded as “financial assistance”. The report states around 150 clients have received payments from Storm since last June.
Control of Storm’s business and records has now passed from Worrells Solvency and Forensic Accountants to KordaMentha.
Recommended for you
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
