Australia Fund comes to the end

The Financial Options Group Inc (FOGI) and the Australia Fund, which had been issued with stop orders from the Australian Securities and Investments Commission (ASIC), have now been ordered to wind up by the watchdog.

Through the Supreme Court of New South Wales, ASIC successfully applied to have the two entities wound up after initially having the assets frozen of the two directors of FOGI, Robert Geoffrey Walker and Robert Gary Johnstone in mid January.

ASIC also announced that provisional liquidator Peter Murray of Ferrier Hodgson is now liquidator of FOGI and the Australia Fund.

FOGI and the Australia Fund originally attracted ASIC’s attention on January 4 this year when the watchdog investigated alleged deficiencies within the business. FOGI operated an investment and futures business and is the major shareholder of the Australia Fund.

On January 9, 2002, ASIC placed an interim stop order on the Australian Federation Fund’s prospectus, preventing any offer, issue, sale or transfer of securities under the prospectus. The prospectus, dated February 2, 2001, related to the Australian Federation Fund 2001, Australian Federation Fund 2010, and Australian Federation Fund 2020.

The watchdog’s concerns with the prospectus were that it could be misleading or deceptive following the resignation of four Australia Fund directors and the appointment of a mortgagee in possession to FOGI’s property late last year.

ASIC had previously ordered that Johnstone be prohibited from leaving Australia while Walker also be subject to the same conditions when he returned from overseas. These orders still stand and Walker has now returned to Australia.

The hearing will continue in the Supreme Court on February 28, 2002.