APRA accepts last EU in Trio enforcement action

31 October 2013

The Australian Prudential Regulation Authority (APRA) has concluded its planned enforcement action in relation to former Trio directors, announcing that it has accepted an enforceable undertaking (EU) from former Trio Capital Limited director David Guy Millhouse.

The EU is the thirteenth issued by APRA to former Trio directors and removes them from the industry for periods ranging from three-and-a-half years to 15 years, with one indefinite banning also given to a Trio director.

Millhouse was a director of Trio from November 2003 to October 2005 and a member of the Trio investment committee from January 2004 to October 2005. APRA was concerned he may have contravened the Superannuation Industry (Supervision) Act 1993 (SIS Act) by failing to carry out his duties properly as a director of a superannuation trustee.

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According to APRA, Millhouse has acknowledged APRA's concerns and will not act as a trustee or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of an APRA-regulated superannuation entity for a period of 10 years.

The EU is the result of legal proceedings initiated in August this year by APRA against Millhouse in the Federal Court to have him disqualified from acting as a trustee. APRA has accepted the EU from Millhouse in lieu of further court proceedings.

APRA stated that during his time on the board of Trio, Millhouse approved $85 million in non-arms-length investments which did not undergo adequate due diligence or receive independent recommendations and were favourable to the related parties involved.

APRA also stated that Millhouse failed in his duties as a director of Trio and did not act in the best interests of members. It said losses related to the investments have not been redeemed and were unlikely to be redeemed in the future.

APRA recently received an EU from Trio non-executive director Kurt Groeneveld. Meanwhile, the Australian Securities and Investments Commission has stated it is unlikely to bring to a prosecution against Asia-based US lawyer Jack Flader, whom it considers the central controller of the Trio/Astarra group.

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