The Australian Securities and Investments Commission (ASIC) has obtained orders in the Supreme Court of Queensland in Brisbane to shut down an illegal early release of super scheme, and banning its promoter from managing corporations for 20years.

Mr Richard Clayton Jackson Sharland, the director of Comcash Australasia Pty Ltd (Comcash), was banned following declarations that he and an agent of Comcash, Mr Michael John Muckan, of Eastern Heights, in Queensland, operated unregistered managed investment schemes and carried on a financial services business without holding an Australian financial services licence.

ASIC also obtained orders winding up any of the schemes operated under the names of Comcash Australasia or SMC Corporation, or similar names. Mr Ian Richard Hall of PriceWaterhouseCoopers in Brisbane was appointed as liquidator of the schemes.

Comcash was involved in the promotion of an early release of super scheme, which approached investors to invest their superannuation in a joint venture with SMC Corporation in the Commonwealth of Dominica, through their own self-managed superannuation funds, on the promise of returns between 6 and 11 per cent per annum. Some of the investors were recruited through a website arranged by Mr Sharland.

Investors were advised they could access their superannuation funds through cheap loans from SMC Corporation, typically at 2.5 per cent for 25 years. All funds were deposited into an account called ‘SMC Australia’ which was operated by Messrs Sharland and Muckan.;

Comcash received more than $1 million from 61 investors, however ASIC’s investigation has not found any joint ventures in the Commonwealth of Dominica, nor has it found any evidence that the money was invested there or elsewhere overseas. In most cases, the investors have not received the loans they expected.

The Court ordered that Comcash, Mr Sharland and Mr Muckan be permanently restrained from promoting or operating the Comcash managed investment schemes, and from providing any financial services in relation to superannuation interests or holding out that they are able to provide such financial services.

The orders follow declarations that Mr Sharland:

• made statements which were materially misleading and likely to induce another person to apply for or dispose of a financial product when he ought reasonably have know that the statements were materially misleading;
• induced other people to deal in financial products by making or causing statements to be made recklessly as to whether or not the statements were misleading and dishonestly concealing material facts;
• breached the Enforceable Undertaking he entered into with ASIC on 8 April 2002.

The Court ordered that Mr Sharland to comply with the terms of the Enforceable Undertaking he entered into in 2002.

Mr Sharland, of The Gap in Queensland, also known as Richard Clayton Jackson Stagg and Clayton Michael Richards, entered bankruptcy in November 2000 and is currently an undischarged bankrupt.

‘Illegal early superannuation release schemes expose consumers to considerable financial risks including additional financial hardship in later life as well as severe tax penalties. Consumers should steer clear of schemes that promise early access to their superannuation funds’, Deputy Executive Director of Enforcement, Mr Mark Steward said.

The application to wind up the company Comcash Australasia Pty Ltd was adjourned to a date to be fixed.

ASIC’s investigation is continuing.

Background

Generally, early access to superannuation entitlements is limited to cases of severe financial hardship or on compassionate grounds.

To qualify for early access on the basis of financial hardship, you should consult your superannuation trustee to find out whether you are able to do so. You must satisfy the trustee that you have been receiving a Commonwealth income support payment for a continuous period of 26 weeks and you cannot meet your reasonable and immediate family living expenses.

To qualify for early access on compassionate grounds, your application needs to be considered by the Australian Prudential Regulation Authority before your superannuation trustee can make a final decision.

Further information about early release of superannuation entitlements is available from ASIC’s consumer website, www.fido.asic.gov.au.

End of release

On FIDO, our website for financial consumers and investors, early release of super schemes