ASIC suspends Equititrust's financial services licence

ASIC has suspended the Australian financial services licence of Gold Coast-based property fund manager Equititrust Limited for failing to comply with a number of key obligations as a licensee.

The company, which was founded by Mark McIvor, is the responsible entity of the Equititrust Income Fund (EIF) and the Equititrust Priority Class Income Fund (EPCIF), currently being wound up under orders from the Queensland Supreme Court.

ASIC found that Equititrust has breached its legal obligations and licence conditions in that it failed to comply with its obligation to maintain at least $5 million net tangible assets; failed to prepare and lodge annual audited financial statements and to provide annual financial reports to members of EIF and EPCIF for the financial year ended 30 June 2011; and failed lodge compliance plan audits for EIF and EPCIF for the financial year ended June 30, 2011.

EIF is a registered managed investment scheme whose primary business is lending retail investors’ pooled funds for property development and taking mortgages over the property.

EPCIF is also a registered managed investment scheme which is now dormant. It offered investors the opportunity to “to take up the balance of bank’s first-ranking position in the Equititrust Income Fund”.

On November 21 the Supreme Court of Queensland ordered that these two funds be wound up, with David Whyte from BDO appointed as independent receiver.

The court also appointed Whyte as receiver of the property of both funds.

The winding down of the funds could take between three and five years to be complete.

Westpac is owed $24 million by Equititrust; NAB is owed $9.1 million, and the Bank of Queensland is also a major creditor.

Further trouble for Equititrust looms in a possible class action being prepared by Sydney-based law firm Piper Alderman on behalf of about 40 unit-holders, who have $30 million invested in the funds.

Equititrust has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.


Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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