Storm Financial planning subsidiary in spotlight
UPDATED: End of the road for Storm Financial's southern associate
There are concerns that a wholly-owned financial planning subsidiary of Storm Financial — the Victorian Families Retirement Investment Group — may soon follow in the footsteps of its parent company by being subject to a series of large claims from clients.
The Victorian Families Retirement Investment Group (Victorian Families) is now all but closed, but the receivers of the Storm Financial Group fear client action against the group is in the pipeline.
Korda Mentha were appointed by the Commonwealth Bank of Australia (CBA) as receivers of the Storm group earlier this year. Its mandate is to recover as much funding as possible from the now defunct company.
While Victorian Families itself is not in receivership, the shareholding of the company is subject to control by Korda Mentha, the administrators said.
But the administrators’ report said the receivers have “declined to take control of Victorian Families”. This is due to the fact that the receivers are “quite properly, concerned that the company may be subject to a series of large claims from clients”.
Meanwhile, the administrators of Storm Financial and its related entities (Worrells Solvency and Forensic Accountants) have instructed their solicitors to seek the appointment of liquidators to Victorian Families.
According to the report issued by Worrells, “all of the directors of Victorian Families have resigned and the business of that company has effectively ceased”.
The authorised representatives of the group included Emmanuel Cassimatis, George Cassimatis and Julie Cassimatis, all directors of the failed Storm Financial group in Queensland.
As reported by Money Management, the principals of the Geelong-based financial planning firm wrote to clients in February informing them it could not provide financial advice at that time due to the fact that it did not have any advisers, but were nonetheless “working quickly towards rebuilding our advisory staff and hope to be back in a position to provide financial advice to our clients very soon”.
The Worrells report said more information about Victorian Families would be provided at the next meeting of Storm creditors, which has been postponed to March 30 as a result of the Federal Court application made yesterday by the Australian Securities and Investments Commission to appoint a liquidator to Storm Financial.
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