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01/156 ASIC obtains court orders appointing temporary responsible entity to mortgage scheme
The Australian Securities and Investments Commission (ASIC) today obtained orders in the Supreme Court of Queensland removing Triscott Investments Limited as responsible entity of the Australian Managed Mortgage Investments Fund (AMMIF).
The orders also appointed La Trobe Capital and Mortgage Corporation Limited to act as temporary Responsible Entity of the scheme. As temporary Responsible Entity, La Trobe will operate the scheme pending a later meeting of scheme participants to appoint a replacement Responsible Entity to the scheme.
ASIC's application to court follows a decision by ASIC earlier this week to revoke the dealers licence of Triscott Investment which authorised it to operate the AMMIF scheme.
'ASIC revoked Triscott Investment's dealers licence because we were concerned that licence conditions designed to protect the public had been breached', said Darren McShane, ASIC's Director of Managed Investments.
ASIC's decision to revoke the dealers license was based on concerns, amongst others, that Triscott Investment had breached:
- conditions of its licence which required it to engage an external compliance consultant to report on internal compliance standards;
- a condition of its licence requiring it to give prior notification to ASIC of matters which may affect its eligibility to hold a license. ASIC was particularly concerned about failure to notify an arrangement whereby TIL had purported to delegate to a third party its core management responsibilities without ensuring adequate arrangements for oversight and supervision of that delegation;
- a condition of its licence in not having fully complied with prescribed loan assessment guidelines;
- requirements of the AMMIF Compliance Plan; and
- section 728 of the Corporations Law in having lodged, and not having subsequently corrected, a Prospectus in relation to the offer of interests in AMMIF which contained misleading statements, notably the incorporation of ambiguous references to the manner of disbursement loan repayment proceeds and having referred to the appointment of an external compliance consultant.
ASIC also found that Triscott Investment:
- had failed to prepare and lodge half-yearly financial reports with ASIC;
- had not performed the duties of a dealers licence holder efficiently, honestly and fairly; and
- had fallen short of the standards required of a securities dealer.
Triscott Investment had sought to convene a meeting of scheme members on 18 May 2001 to seek member's approval to appoint a replacement Responsible Entity. However, ASIC was concerned that the proposed replacement was not licenced to manage the AMMIF scheme.
Accordingly, ASIC also obtained orders restraining the meeting from dealing with resolutions in relation to the proposed appointment.