Wednesday 30 May 2007 ASIC Winds Up Unregistered Retirement Village Schemes On 29 May 2007, the Federal Court of Australia made final orders completing the winding up of two related investment syndicates (the scheme) relating to the proposed Carrington Square Retirement Facility (also known as Madden Grove Village) located in Kew, and Primelife Corporation limited (Primelife), following proceedings brought by the Australian Securities and Investments Commission (ASIC).
Mr Justice Middleton of the Federal Court made the orders further to: • An independent accountant, Mr Andrew McLellan, being appointed to investigate and report into the past affairs of the scheme to identify assets and the scheme’s investors, and • All investors being given an opportunity to consider Mr McLellan’s findings and a proposal about how the scheme should be wound up. The proposal accepted by His Honour involved the distribution of the assets of the scheme to the investors. Before making the orders, the Court heard that the distribution would involve a return of funds to the investors greater than their initial contributions to the scheme.
‘ASIC specifically sought the appointment of an independent accountant to review the schemes so investors and the Court were able to make informed decisions about the method by which the scheme should be wound up and its assets distributed’, said ASIC’s Executive Director of Enforcement, Ms Jan Redfern. ‘Our guiding concern has been to provide a flexible framework to help maximise returns to investors’, Ms Redfern added. Background On 23 September 2004, ASIC filed 37 proceedings in the Federal Court of Australia seeking, amongst other things, orders that an investigating accountant be appointed over each of the schemes to report to the Federal Court to ascertain the position of each of the schemes. ASIC also applied for the schemes to be wound up. ASIC alleged that the schemes were not registered, as required under the Corporations Act. ASIC brought the Federal Court proceedings against Primelife and a number of other defendants including parties who, ASIC alleges, have been involved in promoting and managing the schemes to a large number of investors since 1997.
ASIC entered into terms of settlement with Primelife in the proceedings on 1 April 2005 in respect of those 37 proceedings (and two further proceedings commenced on 22 June 2005,ASIC Media Release 05-80 refers). While ASIC had entered into terms of settlement with Primelife, the proceedings against the other defendants were ongoing. For further information contact: Name: Jan Redfern Job Title: Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Name: Michael van Maanen ASIC Media Unit Telephone: 02 9911 2658 Mobile: 0412 500 351