On 30 September 2024, the Queensland Supreme Court directed A.C.N. 114 733 569 Limited (formerly ISG Financial Services Limited) (ISG), the responsible entity for the ISG Private Access Fund and the ISG Real Estate Equity Fund (together, Schemes), to wind up the Schemes in accordance with their constitutions, and appointed receivers over the property of each of the Scheme to take responsibility for the winding up.
On 27 August 2024, ISG and its director, Benjamin Godfrey, applied to appoint receivers to the Schemes. On 5 September 2024, ASIC intervened in the proceeding because it held concerns about, amongst other things, ISG’s financial, governance and compliance positions. Some investors in the Schemes also intervened and were granted leave to apply for different receivers than those proposed by Mr Godfrey and ISG to be appointed to the Schemes. ASIC agreed to the appointment of the receivers proposed by those investors, and the Court agreed.
Neil Robert Cussen, Anthony Phillip Wright and Katherine Barnet of Olvera Advisors Pty Ltd were appointed receivers of the Schemes (Receivers).
The Receivers are required to report to the Court as to the winding up of the Schemes by 11 November 2024 and on various matters including:
- whether investors or any other creditors may have a claim against either or both of the Schemes, ISG or its current or former officers and/or directors;
- the property and assets of each of the Schemes;
- the liabilities and creditors of the Schemes, and the investors in the Schemes and the amount of their investments;
- the solvency of the Schemes;
- the likely return to creditors and investors, including investors in respect of specific classes of units issued in the each of the Schemes; and
- the scope of work remaining to wind up the Schemes and a timeframe for that work to be completed.
The Court also ordered that the Receivers’ reasonable costs and expenses, once determined by the Court, are to be paid out of the assets of the Schemes.
Background
ISG holds an Australian Financial Services Licence (AFSL) and is the responsible entity of the Schemes. Investors were issued units in the Schemes and the Schemes invested in redeemable preference shares in related special purpose companies focusing primarily on property developments. These special purpose companies were primarily controlled by ISG’s director, Benjamin Godfrey.
Since 2019, the Schemes have received approximately $145 million from retail and wholesale investors.
On 1 July 2022, ASIC suspended ISG’s AFSL, having found that ISG had failed to meet statutory audit and financial reporting lodgement obligations for itself and the Schemes, and did not have required professional indemnity insurance coverage in place between 14 July 2020 and 21 June 2021. ASIC revoked the licence suspension on 6 February 2023, upon lodgement of ISG’s outstanding statutory audit and financial reports.
In September 2022, ISG ceased paying distributions and later froze investor redemptions.
Since July 2023, ASIC has been undertaking an investigation into suspected contraventions of provisions of the Corporations Act 2001 (Cth) in relation to the affairs of ISG. The investigation is ongoing.
On 10 September 2024, ISG appointed Mr Christopher John Baskerville of Jirsch Sutherland as its voluntary administrator.