ASIC has obtained orders in the Federal Court of Australia at Melbourne yesterday freezing the assets of CME Capital Australia Pty Ltd (CME Capital Australia), Boston Pacific Capital Australia Pty Ltd (Boston Pacific Capital Australia) and GKN Capital Pty Ltd (GKN).

ASIC sought the orders after concerns that the companies were soliciting investments from the public without proper disclosure and the way the funds have been applied.

Justice Mark Moshinsky ordered the companies (along with Boston Pacific Capital Pty Ltd and IMCG Pty Ltd) be restrained from:

• removing any company property;
• selling, charging, mortgaging, dealing with, disposing of or diminishing the value of any company property;
• incurring new liabilities; and
• withdrawing, transferring, disposing of or dealing with any monies available to the companies.

Mr Michael Petrou (the sole director of CME Capital Australia Pty Ltd, Boston Pacific Capital Australia Pty Ltd, Boston Pacific Capital Pty Ltd and GKN Capital Pty Ltd) and Mr Branislav Grujicic (the sole director of IMCG Pty Ltd) were also ordered to surrender their passports to the court and be restrained from leaving Australia.

ASIC sought the injunctions to protect investor funds while an ASIC investigation is continuing.

The matter has been listed for a further hearing on 10 December 2015 at 10.15am.

Background

CME Capital Australia Pty Ltd, Boston Pacific Capital Australia Pty Ltd and GKN Capital Pty Ltd operate websites through which investments are invited from the public.  According to the websites, the companies—none of which hold an Australian financial services licence—issue promissory notes in exchange for investments.

Under s727 of the Corporations Act 2001, an offer of securities (which includes promissory notes) must not be made unless a disclosure document has been lodged with ASIC. An exception to this is when the offer is made to a professional investor, as defined by s9 of the Act, or has (or controls) gross assets of $10 million.

Editor's note 1:

On 4 December 2015 the Court listed the matter for a hearing at 4.00pm on 7 December 2015.

Editor's note 2:

On 7 December 2015 the Court ordered that the current freeze be extended until 21 December 2015. Among other orders made, the Court ordered that ASIC file any application for the appointment of a provisional liquidator by 4.00pm on 7 December 2015, with that application to be heard on 10 December 2015.

Editor's note 3:

On 10 December 2015 the Court adjourned ASIC's application for the appointment of a provisional, part heard, until 10.15am on Tuesday 15 December 2015. In doing so, the Court ordered that the defendants file any material that they wish to rely upon in opposition to ASIC's application by 4pm on 13 December 2015.

Editor's note 4:

On 11 December 2015 Mr Petrou appointed Luke Targett and Dennis Turner of BDO as joint and several administrators of Boston Pacific Capital Pty Ltd, Boston Pacific Capital Australia Pty Ltd, GKN Capital Pty Ltd and CME Capital Australia Pty Ltd.

Editor's note 5:

On 15 December 2015 the Court adjourned ASIC's application for the appointment of a provisional liquidator until 21 December 2015.

Editor's note 6:

On 21 December 2015 following an application by ASIC, the Federal Court of Australia ordered the appointment of Ross Blakeley and Quentin Olde of FTI Consulting as joint and several provisional liquidators of CME Capital Australia, Boston Pacific Capital Australia Pty Ltd , Boston Pacific Capital, GKN and IMCG Pty Ltd (IMCG). The matter will be listed for a further hearing on a date to be fixed (refer: 15-404MR).