The Federal Court of Australia has appointed a liquidator to an unregistered managed investment scheme involving the Victoria Garden Retirement Village and Primelife following proceedings brought by the Australian Securities and Investments Commission.
Yesterday, the Federal Court orders appoint Andrew McLellan of PPB Chartered Accountants, as custodian, trustee and liquidator of the scheme.
McLellan had previously been appointed by the Court to investigate and report into the past affairs of the scheme so as to identify the assets and identity of the investors.
Following the completion of McLellan’s report, all investors were given an opportunity to consider McLellan’s findings and were able to consider proposals about how the scheme should be wound up.
“Because an independent investigation into the scheme was conducted, ASIC ensured that investors were able to make informed decisions as to the best manner in which the scheme should have been wound up,” ASIC’s executive director of enforcement, Jan Redfern said.
ASIC sought the appointment of a liquidator after an independent accountant found there were significant disputed liabilities of the scheme.
The Federal Court of Australia agreed with ASIC that those disputed liabilities were best dealt with by the appointment of a liquidator.
Primelife’s managing director Jim Hazel said the appointment of McLellan relates solely to the winding up of the syndicate and does not relate to any Primelife company or the operation of the facility.
“Investors, residents and their families should have absolutely no concern that the appointment of Mr McLellan will impact on Primelife or any of its subsidiaries,” he added.
By Kathryn O’Meara
Background
On 23 September 2004, ASIC filed 37 proceedings in the Federal Court of Australia seeking, among other things, orders that an independent accountant be appointed over each of the schemes to report to the Federal Court to ascertain the position of each of the schemes. ASIC also applied for the schemes to be wound up. ASIC filed two further proceedings on 22 June 2005.
ASIC alleges that the schemes are not registered, as required under the Corporations Act. ASIC brought the Federal Court proceedings against Primelife and a number of other defendants including parties who, ASIC alleges, have been involved in promoting and managing the schemes to a large number of investors since 1997.
ASIC entered into terms of settlement with Primelife in the proceedings on 1 April 2005, however in several cases the proceedings against the other defendants are ongoing.
ASIC has now finalised 17 of the proceedings, involving the winding up of eight schemes. There are a further eight proceedings where orders have been made for the winding up of the relevant schemes. In these proceedings, the independent accountant is preparing his report or the parties are formulating proposals for the manner in which the schemes should be wound up.
