ASIC has cancelled the Australian financial services licence (AFS licence) of Sydney-based financial services provider Australian Mutual Holdings Limited (Australian Mutual). Australian Mutual was a responsible entity who operated a number of managed investment schemes. 

The cancellation was effective from 5 July 2019.

The terms of the AFS licence cancellation allow Australian Mutual’s AFS licence to provide financial services which are reasonably necessary for, or incidental to, the winding up of the:

• Australian Pink Diamond Fund ARSN 120 329 240;
• Grange Capital Management Growth Plus Fund ARSN 120 328 823; and
• Accelerated Trend Hedge Fund ARSN 116 742 333 (AFS Licence Cancellation).

‘A key priority for ASIC is ensuring that responsible entities take their duty to act in the best interest of investors seriously. This duty of loyalty has been described as the ‘most fundamental’ rule of trust law. The community expects responsible entities to fully comply with the best interest duty and ASIC will take legal action to enforce this,’ ASIC Commissioner Danielle Press said.

On 8 July 2019, ASIC varied the AFS licence cancellation to include the Trident Global Growth Fund ARSN 120 329 026.

Background

Australian Mutual held AFS licence 295393 from 10 February 2006.

On 28 June 2019, Peter Paul Krejci of BRI Ferrier (NSW) Pty Ltd was appointed voluntary administrator of Australian Mutual. Under the Corporations Act, ASIC has the power to suspend or cancel an AFS licence, without holding a hearing, where the AFS licence held by a body corporate is placed under external administration.

Australian Mutual has the right to seek a review of ASIC's decision at the Administrative Appeals Tribunal.

Following an ASIC investigation, on 17 April 2019, ASIC’s Financial Services and Credit Panel banned Australian Mutual’s joint executive officers and directors, Mr Jeffrey Worboys and Mr Matthew Barnett from providing financial services for six years (MR 19/101).

ASIC found that Mr Worboys and Mr Barnett did not exercise the degree of care and diligence required and failed to act in the best interests of the members of the Courtenay House Capital Investment Fund, which was operated by Australian Mutual. This included a failure to ensure that the persons responsible for trading funds had the requisite qualifications and experience to manage a foreign exchange and derivatives fund.

Mr Worboys and Mr Barnett did not appeal to the Administrative Appeals Tribunal for a review of ASIC’s decisions.

In a separate investigation, ASIC took action to wind up Courtenay House Capital Trading Group Pty Ltd and Courtenay House Pty Ltd. The Supreme Court of NSW appointed Said Jahani and John McIerney of Grant Thornton, as joint liquidators to both companies (17-142MR).