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15-256MR - Attachment - ASIC seeks court orders to wind up Avestra Asset Management
Frequently asked questions
Why has ASIC commenced the proceedings?
ASIC commenced proceedings on 9 September 2015 in the Federal Court of Australia against Avestra Asset Management Ltd (Avestra), due to ASIC’s concerns about the way in which Avestra had operated a number of its managed investment schemes.
Avestra was the responsible entity for various registered schemes, including the following:
- Avestra Advantage Fund (ARSN 136 421 497);
- Excela Australian Equity Income Accelerator Fund, also known as the Accelerator Fund (ARSN 139 641 946);
- Emergent Fund (ARSN 130 533 747);
- Generator Fund (ARSN 127 699 754); and
- Maximiser Fund (ARSN 130 533 685)
(together, Schemes).
ASIC's concerns included that Avestra borrowed money on an unsecured basis from the property of its schemes, and invested scheme property in entities and offshore funds connected to its directors without adequate due diligence or regard for the interests of members.
On 29 April 2016, ASIC joined former Avestra directors Paul Rowles and Clayton Dempsey as additional defendants to the proceeding.
ASIC alleges that Avestra, Paul Rowles and Clayton Dempsey have contravened duties under the Corporations Act 2001 (Cth) (the Act) including, in relation to a number of the Schemes, duties to:
- act in the best interests of members of the Schemes;
- exercise the required degree of care and diligence; and
- do all things necessary to ensure that the financial services provided under Avestra's licence were provided efficiently, honestly and fairly.
On 10 June 2016, the Court will make directions for the future conduct of the proceeding, including setting the date by which the defendants are to file their defence.
What orders does ASIC want the Court to make?
On 11 December 2015, in accordance with the recommendations contained in the report prepared by provisional liquidators appointed by the Court to Avestra, ASIC sought and obtained orders from the Court to wind up each of the Schemes.
On 19 February 2016, ASIC sought and obtained orders from the Court to wind up Avestra, on the basis that it was just and equitable to do so.
The winding up of both the Schemes and Avestra itself is being conducted by Deloitte, independent liquidators appointed by the Court.
ASIC now seeks declarations of contravention in respect of each of Avestra, Paul Rowles and Clayton Dempsey, as well as disqualification orders and financial services-related injunctions in respect of Paul Rowles and Clayton Dempsey.
Can I review the court documents filed by ASIC in the proceeding?
- Originating process filed by ASIC to commence the proceeding (as subsequently amended).
- Concise statement filed by ASIC in the proceeding.
- Statement of claim filed by ASIC in the proceeding.
Any person wishing to inspect the affidavits filed by ASIC in this proceeding may apply to the Federal Court of Australia for leave to inspect.
Will investors receive any compensation?
ASIC is not, as part of this proceeding, seeking orders that Avestra, Paul Rowles or Clayton Dempsey provide compensation to investors for any losses that may have been suffered as a result of their conduct.
Investors may wish to seek independent legal advice if they believe they may have a claim for compensation for any losses suffered.
ASIC's guide on the process of liquidation may assist investors and is accessible at: Information Sheet 45 Liquidation: a guide for creditors (INFO 45).
Who can I speak to about my investment and the status of the companies in liquidation?
Investors in the Schemes seeking information about their investments should contact the liquidators, Deloitte:
Website: www.deloitte.com/au/avestra-asset-management
Telephone:
- +61 7 3308 7218
- +61 7 3308 7150
- +61 7 3308 1289
Back to media release 15-256MR ASIC seeks court orders to wind up Avestra Asset Management