Wednesday 7 February 2007 LAWFUEL – Legal News Network – The Federal Court of Melbourne has appointed liquidators to three companies which allegedly misused superannuation funds following a successful application by the Australian Securities and Investments Commission (ASIC). Today’s orders appoint Messrs Simon Wallace-Smith and Timothy Bryce Norman of Deloitte as official liquidators to E.K.B. Properties Pty Ltd (EKB), Sandgrove Specialised Securities Ltd (Sandgrove) and Cardinia Specialised Securities Ltd (Cardinia).
The orders were unopposed by the three companies. ASIC sought the orders following concerns that the funds invested by clients totalling at least $2.5 million were at risk and may have been lost. ASIC sought the appointment of liquidators to ensure that the best interests of investors and creditors of these companies were considered independently. ASIC also obtained consent orders against Mr Barry John Patrick of Pakenham, and Mr Karl Heinz Hermann Veljkovic, of Beaconsfield, Victoria, banning them from: • carrying on a financial services business; • parting with any funds that have come into their possession by them issuing, selling or offering a financial product; and • from managing corporations.
ASIC sought that Messrs Patrick and Veljkovic be banned for a period of 20 years. While Mr Patrick consented to the 20 year banning period, Mr Veljkovic agreed to an interlocutory injunction* in those terms, pending the outcome of ASIC’s court action against him. ASIC alleged that between May 2003 and January 2006, Messrs Veljkovic and Patrick advised many of the investors to roll over their superannuation into self-managed funds and then invest those funds in companies either operated by or associated with Mr Veljkovic and Mr Patrick, including EKB, Sandgrove and Cardinia. None of the investors have been repaid.
ASIC is also seeking orders that Messrs Veljkovic and Patrick be found guilty of contempt of court after allegedly breaching previous orders made by the Federal Court on 11 October 2001. This matter has been adjourned to 16 March 2007 in the Melbourne Federal Court. Background On 11 October 2001, the Federal Court made orders by consent that Mr Veljkovic and Mr Patrick be restrained until 11 October 2006 from soliciting money from a regulated superannuation fund for an unregistered managed investment scheme, carrying on an unlicensed securities business which involves the soliciting of money from a regulated superannuation fund, and carrying on an unlicensed investment advice business which comprises advice to a regulated superannuation fund (refer to ASIC media release 01-366).
ASIC’s application in this current matter was filed in the Federal Court on 21 December 2006 (refer to ASIC media release 07-10). * An interlocutory injunction is a judicial remedy issued by the Court in order to prohibit a party from doing or continuing a certain activity. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Emma Forehan ASIC Media Unit Telephone: 03 9280 3354 Mobile: 0409 702 310