Three Brisbane-based companies have provided undertakings to the Supreme Court of Queensland in relation to the operation of a managed investment scheme, following proceedings commenced by the Australian Securities and Investments Commission (ASIC).

Hillston Grove Vineyards Ltd (Hillston Grove), Managed Investments Australia Ltd and Investment Licensing Pty Ltd provided the undertakings, through their directors, to the Court following concerns that the Hillston Grove Vineyards Project, a managed investment scheme, was not being conducted in accordance with the Corporations Act 2001.

ASIC commenced proceedings after an application by Hillston Grove to obtain an Australian financial services license (AFSL) and register the Hillston Grove Vineyards Project (the Project) was refused.

The Project offered investors the opportunity to participate in the development and operation of a 400-hectare vineyard for wine grape production located in Hillston, in New South Wales. The project was a prescribed interest scheme that was formerly regulated by the Corporations Law.

‘Managed investment schemes must be registered with ASIC and operated by a responsible entity holding an AFSL’, ASIC’s Executive Director, Enforcement, Ms Redfern said

ASIC alleges that the Project has become an unregistered managed investment scheme, after failing to meet the current requirements of the law. As a result, ASIC is seeking orders to wind-up the Project.

As part of the undertakings provided to the Court, Hillston Grove, Managed Investments Australia and Investment Licensing, through their directors, agreed:

• not to do any act to further the Project;
• not to deal in any way, whether directly or indirectly, with any funds or monies standing to the credit of or under the control of the companies or the Project;
• not to deal in any way, whether directly or indirectly, with any real or personal property, assets or interest in property of any kind, within or outside Australia of each of the companies and the Project; and
• not to deal in any way, whether directly or indirectly, with any interests in the Project including the sale, offer or issue of new interests, and the sale, offer, transfer or disposal of existing interests.

‘ASIC will act to ensure that managed investments schemes are licensed to provide protections and safeguards for investors’, Ms Redfern said.

The undertakings will not prevent the companies and the Project from paying the day-to-day expenses associated with managing the companies and the Project, which are to be notified to ASIC weekly. The undertakings will also not prevent Managed Investments Australia from carrying out its duties under any managers agreement entered into prior to the date of the Court undertaking.

ASIC’s proceedings to wind-up the scheme was adjourned to a date to be fixed.

Since commencing proceedings in the Supreme Court, Hillston Grove lodged an application with the Administrative Appeals Tribunal for a review of ASIC’s decision refusing the application for an AFSL.