ASIC closes WA property scheme

AN unregistered property development scheme in Western Australia has been ordered to be wound up by the Federal Court, following an investigation by the Australian Securities and Investments Commission.

Yesterday, the Court ordered the development scheme associated with the Lake Coogee Estate in Perth – operated by Lake Coogee Estate Management Pty Ltd (LCEM) in conjunction with Citibond Finance and Investments Pty Ltd (Citibond) and ALB Developments No 1 Pty Ltd (formerly Australian Landbank Pty Ltd) (ALB), to be wound up.

The orders follow interim orders issued by Justice Nicholson in October last year, preventing the companies from further dealing with the scheme assets.

The orders required the convening of a special meeting whereby investors were invited to consider and vote on proposals regarding the manner in which the scheme should be wound up.

The Court has ordered LCEM to complete the scheme within 24 months and appointed an independent supervisor to oversee the scheme’s completion as well as regularly report on the progress to investors, the Federal Court and ASIC.

ASIC’s executive of enforcement Jan Redfern said managed investment schemes must, by law, be registered with ASIC.

“Schemes that are not registered fail to afford investors the protections they would otherwise have access to, should the need arise.

“This is a practical solution, limited to the facts of this case, in that it facilitates a court-approved process to ensure the Lake Coogee project will be completed in an open and fair manner. It considers the legal requirements but does not limit opportunities for investors,” she added.

ASIC investigated the alleged scheme after receiving a complaint from an investor. ASIC’s investigation revealed that at no time did any person or company connected with the development of the Estate register the scheme with ASIC, as required under the Corporations Act.

LCEM, in conjunction with Citibond and ALB, sought to develop the Estate at the intersection of Fawcett and Major Roads in Munster, Perth in Western Australia.

In July 2005, Citibond and ALB issued an information memorandum to the investing public offering units in the Lake Coogee Estate Trust, which would fund the development of the Estate.

Australian Property Journal