Court appoints independent party to verify managed fund’s finances
The Federal Court has appointed an independent party to have full control of the bank accounts of managed fund Shield Master Fund.
Last week, ASIC stated it had obtained interim orders to freeze the assets of the Shield fund, whose responsible entity was Keystone Asset Management, to help protect investor funds.
Shield is a registered managed fund but has been closed to new investments as per interim orders made in February 2024.
Following a further hearing on 26 June, the Federal Court has now appointed Jason Tracy and Lucica Palaghia of Deloitte to have full control of Shield’s bank accounts. This prevents Keystone from selling, transferring, or dealing with Shield’s assets, other than to make certain payments that must first be approved by Deloitte.
Tracy and Palaghia will have to assess whether payments are in the best interest of Shield investors and prepare a report on Shield’s financial position by 23 July 2024.
The reason for the individuals’ appointment is to protect investor funds amid an ongoing investigation into the management and operation of Shield and the associated risks to investors.
ASIC said some of these concerns include:
- Keystone has failed to lodge Keystone’s and Shield’s audited FY2023 financial statements.
- A large proportion of the funds held by Shield have been directed to a fund which made loans to various companies associated with Paul Chiodo, a former director of Keystone, to fund property developments.
- Ensuring there is independent oversight with respect to any payments going forward.
Chiodo also provided an undertaking to the court to give ASIC written notice 14 days prior to any international travel and to take all reasonable steps to comply with any notices issued by ASIC in the event he is travelling overseas. Travel restraint orders previously made by the court on 18 June 2024 have been vacated.
The matter will be back before the court in August, but a date has not yet been fixed.
AUTHOR
Laura Dew
Recommended for you
Pinnacle has reported a 151 per cent rise in net profit after tax in its half-year results, helped by overseas expansion and affiliate performance fees with further international deals in the pipeline.
Global asset manager Janus Henderson generated more than US$2 billion in net inflows during 2024, thanks to its strengthened intermediary channel and M&A activity.
Amid the rising demand for more flexible private equity investment options, LGT Capital Partners has launched a semi-liquid fund for wholesale investors in Australia and New Zealand.
The departure of Gerald Stack from Magellan could lead to redemptions as high as $8 billion, according to Morningstar, given the majority of assets in his infrastructure strategies are held by institutional clients.
