Provisional liquidators appointed to companies in suspected ‘Ponzi scheme’

13 January 2016
| By Nicholas |
image
image
expand image

The Federal Court of Australia has appointed provisional liquidators to five companies the Australian Securities and Investments Commission (ASIC) believes have been operating a ‘Ponzi scheme', in a case involving two of the Country's big four banks.

ANZ and the Commonwealth Bank of Australia were listed among 13 co-defendants in the case.

Court papers revealed that ASIC claims "there is substantial evidence" that CME Capital Australia Pty Ltd, Boston Pacific Capital Australia Pty Ltd, GKN Capital Pty Ltd, Boston Pacific Capital Pty Ltd and IMCG Pty Ltd, were "operating a ‘Ponzi scheme'.

The court documents revealed that the companies raised "approximately $13.55 million from investors", of which "approximately $2 million" was lent to Loma Estate Pty Ltd, which "appears to be operated by Mr Lou Garita", who has been named as a director on ASIC's register, "although he is an undischarged bankrupt and ineligible to act in that position".

A further $1.75 million was lent to Berkshire NWI Invest LLC, with Michael Petrou, the sole director of four of the five companies set to which liquidators have been appointed, reporting that no income had been made available to fund interest payments to investors.

The fifth defendant, IMCG, was lent $7.24 million, in respect to which losses of about $2 million have been incurred.

"It appears that about $4.3 million is left, but more than $7.2 million is owed to the companies", the court papers stated.

The court's decision to appoint provisional liquidators to the five companies came 10 days after Petrou, appointed administrators to the businesses he was sole director of, CME Capital Australia Pty Ltd, Boston Pacific Capital Australia Pty Ltd, GKN Capital Pty Ltd and Boston Pacific Capital Pty Ltd, on the grounds that the administration would not be in the best interests of creditors.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 5 days ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 3 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

11 hours 36 minutes ago