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Monday 17 July 2017

17-238MR ASIC takes action to wind up land banking scheme and its operator

ASIC has commenced proceedings in the Federal Court of Australia to wind up a land banking scheme known as the VKK Investments Unit Trust (VKK scheme), as well as the trustee and operator of the scheme, Gem Management Group Pty Ltd (Gem).

The VKK scheme owns land located at 64 Hutton Road, Keysborough in Victoria. 

ASIC understands that around 125 investors have invested a total of approximately $22 million into the VKK scheme. Gem has operated the VKK scheme since May 2010.

ASIC alleges that the VKK scheme constitutes a managed investment scheme which has not been registered, in contravention of the Corporations Act 2001(Act). ASIC also alleges that Gem, which does not hold an Australian Financial Services licence, has also breached the Act by operating an unregistered managed investment scheme.

ASIC is seeking to appoint liquidators to both the VKK scheme and Gem.

Gem and the VKK investors will have the opportunity to make submissions to the Court in relation to ASIC's application.

See VKK Investments Unit Trust -frequently asked questions for more information about these proceedings.

These proceedings are part of ASIC's wider and ongoing investigation into land banking schemes.  Further information on land banking is located on ASIC's MoneySmart website.

Editor's note 1:

At the first return date on 9 August 2017, Gem indicated its intention to oppose ASIC's application to wind up Gem and the VKK scheme. Further, a group of investors represented by HWL Ebsworth has indicated they may wish to apply to the court to join the proceedings. The Federal Court made orders providing for:  

  • the filing and service of Gem's affidavits by 20 September 2017; and 
  • any application to join the proceedings by investors who are represented by HWL Ebsworth to be made on or before 30 August 2017. 

The matter returns before the Court for a further case management hearing on the first available date after 18 October 2017.

Editor's note 2:

The next case management conference has been fixed for 3 November 2017 at 9.30am.

Editor's note 3:

The matter returned for a second case management hearing on 27 October 2017, a week earlier than the expected 3 November 2017 hearing, to address Gem's default in filing and serving its affidavits.  

At the hearing, orders were made granting leave to a group of investors to be heard in the proceeding without becoming parties, and extending the timetable for the filing and service of affidavits. The case management hearing listed for 3 November 2017 and the interlocutory hearing listed for 10 November 2017 were both vacated. The Court also noted the Notice of Appearance filed by Prime Charter Pty Ltd as supporting creditor. 

The matter has been listed for trial commencing on 16 April 2018 for an estimate of 5 days.

Last updated: 30/03/2021 09:30