On 27 August 2024, the Federal Court made orders appointing Jason Tracy and Lucica Palaghia of Deloitte as receivers and managers of the property of Keystone Asset Management Ltd (Keystone Asset Management), the responsible entity for the Shield Master Fund (Shield).

The receivers are required to:

• secure the property held by Keystone Asset Management in its capacity as responsible entity of Shield and trustee of certain other funds
• identify how Shield investor funds were used by Keystone Asset Management
• recover Shield investor funds, and
• provide a report to the Court within 28 days about the solvency of Keystone Asset Management and the likely return to creditors and investors in the event that Keystone Asset Management and Shield were to be wound up.

When handing down his reasons in relation to the appointment of receivers, Justice Moshinsky stated:

“The extent of Keystone’s mismanagement confirms that there is a need to protect the interests of investors from what appear to be conflicts of interest and breaches of trusts…On the basis of the material before the Court, I do not have confidence that the SMF [Shield Master Fund] and ADPF [Advantage Diversified Property Fund] are being managed in the best interests of investors, or that Keystone is capable of providing such management…there are real doubts about the status and value of investments in the SMF and ADPF.”

On 28 August 2024, ASIC was notified that the directors of Keystone Asset Management had appointed Scott Langdon, Michael Korda and John Mouawad of KordaMentha as voluntary administrators of Keystone Asset Management.

On 5 September 2024, on ASIC’s application, the Federal Court made orders removing Scott Langdon, Michael Korda and John Mouawad of KordaMentha as voluntary administrators and appointed Mr Tracy and Ms Palaghia of Deloitte as voluntary administrators in addition to their role as receivers. ASIC made this application because it was concerned that having two different sets of insolvency practitioners appointed to Keystone Asset Management would involve unnecessary duplication of work and deplete the funds available to investors and creditors. It was also concerned that there may be disagreements between the different sets of practitioners about their powers and responsibilities.

Investors can contact the receivers and voluntary administrators with any queries by emailing shieldinvestors@deloitte.com.au.

ASIC’s investigation is ongoing.

Downloads

Orders – appointment of receivers

Judgment – appointment of receivers

Orders – appointment of administrators

Background

ASIC took action in February 2024 to halt new offers of investments in Shield. ASIC made interim stop orders on four product disclosure statements for Shield (24-018MR). 

The appointment of the receivers follows initial action taken by ASIC in June 2024 to secure the assets held within Shield (24-129MR). 

On 26 June 2024, Mr Tracy and Ms Palaghia of Deloitte were appointed by the Court to take control of Shield’s bank accounts and provide a report on the financial position of Shield in July 2024 (24-137MR).

On 30 August 2024, ASIC filed an application seeking orders including:

• that Jason Tracy and Lucica Palaghia of Deloitte be appointed as provisional liquidators of Keystone Asset Management, or alternatively
• that Scott Langdon, John Mouawad and Michael Korda of KordaMentha, the voluntary administrators of Keystone Asset Management, be replaced by the receivers, Jason Tracy and Lucica Palaghia of Deloitte.

On 5 September 2024, Moshinsky J was not satisfied that it was appropriate to appoint provisional liquidators to Keystone Asset Management and instead appointed Mr Tracy and Ms Palaghia of Deloitte as voluntary administrators in addition to their role as receivers.

ASIC provides regular updates on this matter on its Key Matters webpage.

If you have information that may assist ASIC’s investigation, you can send an email to shield.queries@asic.gov.au

If you have invested in Shield via a superannuation or an investment platform, you can obtain information about what this means for your investment from the providers below:

Editor's Note 1:

Orders made on 27 August 2024 by Justice Moshinsky provided for Keystone Asset Management to immediately make available to the Receivers all books and records which relate to the Property of Keystone Asset Management. All books and records have not been provided to the Receivers. On 29 November 2024, Justice Moshinsky made further orders requiring Mr Chiodo to identify any documents which he objects to providing to the Receivers and the basis of any objections.

Read the orders (PDF 165 KB)

Editor's Note 2:

On 2 December 2024, at the second creditors’ meeting of Keystone Asset Management Ltd (Receivers and Managers Appointed) (Administrators Appointed) (KAM), the creditors resolved to wind up KAM and appoint Jason Tracy and Glen Kanevsky of Deloitte as joint and several liquidators. KAM is the responsible entity for the Shield Master Fund (Shield), see (24-265MR)