On 14 November 2017, the Supreme Court appointed Anthony Castley of William Buck as receiver and manager over the assets of DanFX Trade Pty Ltd, Daniel Farook Ali and associated entities. Freezing orders were also made restraining the disposal of any property (including money and securities) by Mr Ali, DanFX Trade, DanFX Investments Holdings Pty Ltd and D&S Properties Pty Ltd.
ASIC has alleged that Mr Ali, through Dan FX, operated an unregistered managed investment scheme that has raised approximately $13 million from more than 200 investors.
ASIC commenced its proceedings in the Supreme Court for the appointment of a receiver to identify and secure the assets of the alleged scheme for the benefit of investors and creditors. The orders were made on an ex parte basis on 14 November and Mr Ali consented to the continuation of those orders on 21 November 2017.
Mr Castley is to provide a report to the court by 15 January 2018.
The matter returns to the court on 6 December 2017.
ASIC has also permanently banned Mr Ali from providing financial services or engaging in credit activity as a result of fraud charges brought by the Queensland Director of Public Prosecutions in 2012. Mr Ali was sentenced to two and half years' imprisonment, to be suspended after the first six months in prison. This fraud conviction is unrelated to ASIC's current proceedings and only came to ASIC's attention after reports to ASIC about Mr Ali's current investment scheme.
The charge stemmed from conduct that occurred between 19 June 2008 and 16 February 2010, when Mr Ali dishonestly used $30,000 provided to him to invest on behalf of eight investors. Instead of investing the funds, they were used to pay for Mr Ali's own personal expenses.
ASIC investigations into the current scheme are ongoing.
Editor's note:
On 6 December 2017, the Supreme Court made Orders by consent, which require Mr Ali to provide information to the receiver about the location of all assets and funds and the investments made into the scheme by 4pm on 20 December 2017. The Court also extended the time for the receiver to produce his report until 29 January 2018 due to the receiver experiencing delay in regards to the production of books.
ASIC has set up a dedicated email address for investors to provide information to ASIC at danfxinvestors@asic.gov.au to assist ASIC with its ongoing investigation. Investors can provide relevant information by completing this questionnaire about their investment.
Editor's note 2:
On 29 January 2018 ASIC received a report from the receiver. On the basis of that report, ASIC considers that there is no evidence that sufficient funds exist to repay the investors in the scheme which ASIC alleges Mr Ali operated as an unregistered managed investment scheme. A hearing has been set down in the Supreme Court for 10am on 28 February 2018. At this hearing ASIC will be seeking the Court's leave to file an amended originating application in relation to the appointment of a liquidator and the winding up of Mr Ali's companies, continuing the freezing orders in relation to Mr Ali's assets and restraining Mr Ali permanently from managing corporations.
Editor's note 3:
On 28 February 2018, ASIC obtained orders to file an amended originating application in relation to the appointment of a liquidator and the winding up of Mr Ali's companies, continuing the freezing orders in relation to Mr Ali's assets and restraining Mr Ali permanently from managing corporations. A date for the hearing of ASIC's application is yet to be set.
Editor's note 4:
On 16 April 2018 an Interlocutory Application of the Receiver was heard in respect of remuneration and powers of the Receiver. ASIC’s application for the winding up of the corporate respondents is now set down for hearing on 9 May 2018.