ASIC files court orders against Equititrust
ASIC has obtained interim orders in the Supreme Court of Queensland against Equititrust Limited, the responsible entity of two managed investment schemes.
The two schemes are Equititrust Income Fund (EIF) and Equititrust Priority Class Income Fund (EPCIF).
The orders were obtained by consent for the purpose of preserving the status quo of the schemes prior to a hearing by ASIC to consider the suspension of Equititrust’s Australian financial services (AFS) licence and following resolutions made by Equititrust’s board of directors on October 12 that the purposes of EIF could not be accomplished and to take steps to wind up EIF.
The orders obtained by ASIC restrain Equititrust from undertaking various acts regarding its operation of the schemes until December 12, 2011 or earlier by order of the court.
Among other things, in relation to EIF, the orders restrain Equititrust from: modifying or replacing the scheme’s constitution; issuing new interests in the scheme; redeeming, cancelling or modifying existing members’ interests in the scheme; dealing with property held or controlled by Equititrust in its capacity as the responsible entity of the scheme or in its own right, other than in the ordinary course of business; and entering into contracts, deeds or agreements regarding any property held or controlled by Equititrust with any person that is a related party or related entity.
The orders in relation to EPCIF restrain Equititrust from issuing new interests in the scheme without first providing written notice to ASIC.
ASIC has expressed concern that Equititrust is in breach of a condition of its AFS licence requiring that it hold a minimum amount of net tangible assets and has breached provisions of the Corporations Act 2001 requiring that it lodge audited financial reports for EIF and EPCIF and audited reports of its compliance with the compliance plans for both EIF and EPCIF. ASIC has issued a notice to Equititrust giving it an opportunity to appear at a hearing before ASIC in relation to whether to suspend its AFS licence.
Separately in late October 2011, Equititrust issued a notice to the members of EIF informing them that the board had resolved that the purposes of EIF could not be accomplished and that steps be taken to wind up the scheme.
Members have 28 days after being given the notice to call a meeting of members to consider the proposed winding up of the scheme and to vote on any extraordinary resolution members propose about the winding up of the scheme.
ASIC obtained orders to preserve members’ interests in the schemes until these issues are resolved.
