ASIC media releases are point-in-time statements. Please note the date of issue and use the internal search function on the site to check for other media releases on the same or related matters.

Thursday 6 February 2014

14-024MR Court freezes assets and restrains travel following collapse of the Charterhill group

Following an application by ASIC, the Federal Court in Adelaide yesterday froze all assets owned or otherwise held by the founder of the Charterhill group of companies, George Nowak, and his wife, Betty Nowak.

The court also ordered the surrender of Mr and Mrs Nowak's passports and restrained their travel out of Australia, as ASIC investigates the collapse of the Charterhill group, which specialises in assisting clients to invest in property through self-managed superannuation funds (SMSFs).

ASIC's application was brought under section 1323 of the Corporations Act 2001 and followed steps taken by ASIC last week to secure Mr Nowak's passport by agreement and to obtain an undertaking from him that he would not dispose of or otherwise deal with any assets.

The following companies in the Charterhill Group have been placed under external control:

  • Lending Solutions International Pty Ltd – liquidators appointed (Andrew Heard and Anthony Phillips of Heard Phillips)

  • Nova Real Estate Pty Ltd – external administrators appointed (Andrew Heard and Anthony Phillips of Heard Phillips)

  • EJ Property Developments Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners)

  • Financial Wellness Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners).

ASIC is investigating the management and activities of the Charterhill group, which operated as a 'one stop shop', providing advice to clients on the establishment of SMSFs, rollover of existing superannuation funds into an SMSF, sourcing and purchase of investment properties, property management, insurance and taxation.

ASIC will not be making any further comment on its investigation at this time.

Information for clients and creditors of companies in the Charterhill Group

EJ Property Pty Ltd (formerly known as Charterhill Pty Ltd) was an authorised representative of Capital FP Group Pty Ltd (ACN 154 072 287) (Capital FP) which holds an Australian financial services licence. If you have not already raised your concerns through Capital FP's internal dispute resolution (IDR) process, you may do so by contacting them at:

Capital FP Group Pty Ltd
PO Box 397
UNLEY BC SA 5061

If you do not receive a response or you are not happy with the outcome of the IDR process you should contact Capital FP's external dispute resolution (EDR) scheme at:

Financial Ombudsman Service Limited
GPO Box 3
Melbourne VIC 3001
Website: www.fos.org.au
Telephone: 1300 78 08 08

If you are a creditor of Nova Real Estate or Lending Solutions International, you should lodge a proof of debt with the administrator Heard Phillips. Heard Phillips can be contacted on (08) 8212 3433 or by email to Chris Moody, at cmoody@heardphillips.com.au. You can also see notices lodged by administrators and liquidators, such as notices of meetings, by searching ASIC’s Insolvency Notices website www.insolvencynotices.asic.gov.au.

Background

ASIC has recently issued a number of public notices concerning the SMSF industry in Australia:

  • ASIC reports on the quality of advice given to SMSF investors (refer: 13-081MR)

  • ASIC consults on the quality of SMSF advice (refer: 13-243MR)

  • ASIC warns consumers about ads recommending SMSFs purchase properties through government scheme (refer: 13-285MR)

  • ASIC warns real estate industry about recommending property investment through SMSFs (refer: 13-304MR).

Editor's note 1:

ASIC has suspended the Australian financial services licence of Charterhill Group company, Capital FP Group Pty Ltd until 30 November 2014 on the grounds that the company is not carrying on a financial services business.

Under section 915H of the Corporations Act 2001, ASIC has specified that the AFS licence is to continue in effect as though the suspension had not happened for the limited purposes of:

  • Capital FP maintaining membership of its external dispute resolution service, Financial Ombudsman Service Limited, and

  • Capital FP maintaining adequate compensation arrangements, in the form of relevant insurance policies.

Editor's note 2:

On 5 June 2014 the case against Nowak was adjourned to 9 am on Friday, 7 November 2014, by the Federal Court (SA).

Editor's note 3:

Proceedings have been adjourned by consent to a further directions hearing on 27 February 2015.

Editor's note 4:

On 27 February 2015 the matter was ajourned until 29 May 2015.

Editor's note 5:

On 29 May 2015 the Court ordered by consent of ASIC and Mr and Mrs Nowak that the section 1323 travel and asset restraint orders made on 5 February 2014 be vacated, and the proceedings against them be dismissed.  These orders were made following undertakings given to the Court on behalf of Mr and Mrs Nowak. Mr Nowak has undertaken to do certain things including that he will notify ASIC within 14 days of any application to his Trustee in Bankruptcy for permission to depart Australia together with details of his proposed travel itinary and will notify ASIC of any request for the annulment of his bankruptcy prior to 2 July 2017. Mrs Nowak has undertaken that until 30 June 2017 she will notify ASIC within 14 days of her intended departure from Australia together with details of her proposed itinerary.

Last updated: 04/06/2015 12:00