Australia Fund put on hold

TheAustralian Securities and Investments Commission (ASIC)has wound up the Financial Options Group Inc and the Australian Fund and has prohibited its directors from leaving the country.

The Financial Options Group (FOGI) and the Australian Fund 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 Australian 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.

As a result of ASIC’s investigations, the Supreme Court of NSW has appointed Peter Murray Walker of Ferrier Hodgson as provisional liquidator of FOGI and the Australia Fund.

ASIC has also frozen the assets of the two directors of FOGI, Robert Geoffrey Walker and Robert Gary Johnstone, to prevent them from disposing of any personal assets. Johnstone is also prohibited from leaving Australia while Walker will also be subject to the same conditions when he returns from overseas.

The Australia Fund was officially launched in March last year and was marketed with an ‘Australiana’ flavour as a socially responsible hedge fund which, according to the prospectus, would invest in local stand out companies in niche markets.