ASIC has banned the directors of Bugwash Property Pty Ltd, Mr David Bugeja and Mr Brian Washbourne from providing any financial services and being involved in carrying on such a business for a period of six years.
Mr Bugeja and Mr Washbourne, both Queensland-based directors, set up Bugwash Property in November 2015 to provide residential property investment opportunities. Investors would pool their funds through unit trusts with the objective of buying and holding residential property for profit.
Between November 2015 and 10 July 2018, Bugwash Property established and managed 35 unit trusts to acquire property in Queensland. As at 30 June 2021, the total value of the trusts was approximately $24 million.
ASIC found that, from November 2015, in their capacity as directors of Bugwash, Mr Bugeja and Mr Washbourne were involved in the contravention of a financial services law by dealing in financial products and dealing in general insurance products on another’s behalf without the necessary authorisations or licence.
ASIC also found the two directors failed to provide adequate disclosure to investors and failed to act in the best interest of investors.
In banning Mr Bugeja and Mr Washbourne, ASIC found that they are not fit and proper to provide financial services, control an entity that carries on a financial services business, or perform any function involved in the carrying on of a financial services business, and are likely to contravene a financial services law.
Mr Bugeja and Mr Washbourne’s banning is recorded on ASIC’s banned and disqualified register.
Mr Bugeja and Mr Washbourne have the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Bugwash Property unitholders would receive net rental income and potential capital gain from the eventual sale of the properties. Most of the properties held by the unit trusts have since been sold and the proceeds distributed to the unit holders.