Tuesday 29 May 2007 LAWFUEL – The Law News Wire – The Australian Securities and Investments Commission notes that the directors of Australian Capital Reserve Ltd (ACR) yesterday resolved to place ACR and other companies in the Estate Property Group (EPG) into voluntary administration. The administrators of the companies are Colin Nicol, Scott Kershaw, Murray Smith and Joseph Hayes of McGrathNicol. ACR is a finance company, which finances the activities of EPG. ACR raises money from the public by issuing unsecured deposit notes to public investors and loans those funds to EPG to finance its various property activities. The administrators have been appointed over 26 companies, which own 21 separate property developments in NSW and Victoria.
ACR has raised over $300 million between 2000 and 2007, through the issue of 9 (new and replaced) prospectuses. In addition, there are a number of secured third-party financiers that have also advanced funds to EPG. On 9 March 2007, ASIC issued an Interim Stop Order on ACR’s 9th prospectus. This related to a number of concerns relating to disclosure in that prospectus. Following a hearing, ASIC issued a Final Stop Order on that prospectus on 23 April 2007. ACR appealed ASIC’s decision to impose a Stop Order to the Administrative Appeals Tribunal. In the past two months, Permanent Nominees (Aust) Ltd, a member of the Trust Company group and the trustee for the holders of the unsecured deposit notes, and ACR have held discussions about ACR’s financial position, its loan book and the appointment of an independent expert to review ACR’s and EPG’s financial position and to obtain updated valuations of properties in EPG.
ASIC was kept informed and involved in a number of those discussions with the trustee and the directors of ACR in relation to that work and the options being considered to enable ACR (and EPG) to continue to operate. The decision to appoint an administrator was made by ACR’s directors yesterday. ASIC will monitor the situation and provide an update as soon as it can. ASIC is also working closely with McGrathNicol in relation to their investigations. A call centre 1800 002 009 has been established for ACR investors, and updates and information will also be available at www.mcgrathnicol.com. ASIC will also assist investors with information through its Infoline and National Assessment & Action Unit. Contact: Angela Friend ASIC Media Unit Telephone: 03 9280 3338 Mobile: 0412 058 800
