ASIC shuts down super bad boys
TheAustralian Securities and Investments Commission(ASIC) has taken action against a director of a super fund and a promoter of a superannuation rollover scheme after a series of investigations.
A former director of the Employees Productivity Award Superannuation Fund has been sentenced to three years’ imprisonment after pleading guilty to 18 counts of breaching his duties as a director.
John Kenneth Shields, was sentenced in the Queensland’s Southport District Court on Thursday after answering charges that he had improperly used his position as a public company director of EPAS Limited - the corporate trustee of the Employees Productivity Award Superannuation Fund - to gain an advantage for himself.
The charges, laid following an investigation by ASIC, alleged that Shields approved ERPAS making loans to companies or enterprises in which he held an interest.
In addition, it was alleged that in some cases, Shields or related entities received a fee from the borrower obtaining a loan from EPAS and that either he or the related entities received $180,468.
The EPAS superannuation fund, is a public offer fund, which reported significant write-downs on the value of its assets in its annual reports for the years ending 1998 and 1999. The EPAS superannuation fund members benefit accounts were frozen in August 1998 to protect members’ funds. In May, 1999, EPAS Limited was replaced as the trustee of the EPAS superannuation fund and the new trustee is continuing to manage the fund for the benefit of members.
The judge ordered that Shields’ sentence be suspended after serving 12 months, and after entering into a three-year $2000 good behaviour bond.
In further action initiated as a result of ASIC investigations, the alleged promoter of a superannuation rollover scheme, has appeared in the Southport Magistrates Court facing 28 charges laid under the Superannuation Industry (Supervision) Act.
ASIC is alleging that between February 1998 and May 2001 the man, Rocco Ferrantino, made false or misleading statements to induce superannuants and the administrators and trustees of various superannuation funds to rollover preserved benefits into 1st State Home Loans Pty Ltd and that the fund were then used to assist the holders of the superannuation interests to purchase house and land packages.
ASIC alleges that the rollover funds could not be used for this purpose as the preserved component of superannuation cannot be accessed by a superannuant until retirement after age 55 and or when certain other limited criteria are met.
The matter has been adjourned until 21 January next year.
ASIC successfully applied in February for orders appointing liquidators to 1st Home Loans Pty Ltd and the property of related companies.
AUTHOR
Mike Taylor
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