The liquidators of the Astarra Strategic Fund (ASF) are exploring potential recovery actions arising from the losses of the failed Trio Capital underlying investment fund, a letter to Trio superannuation fund members has revealed.
In a letter from ACT Super Management, Trio’s acting trustee informed members that it has been working with the Trio liquidators, PPB Advisory, in relation to potential financial recovery.
“The Acting Trustee has recently been liaising with the Trio liquidators and Trust [The Trust Company] in relation to potential recovery actions arising from the losses in ASF,” the letter, dated 3 September, said.
“The liquidators have advised that they are considering certain claims in respect of ASF and are currently looking at arrangements in relation to the funding of such claims.”
At the time of ACT Super’s appointment as acting trustee in 2009, the investments by the superannuation entities and external unitholders into the ASF had a book value of around $123 million.
In line with potential ASF recovery actions, ACT Super has agreed that some of funds for which The Trust Company is the responsible entity (RE) will remain “in existence” with small cash balances.
Of the 10 funds, seven have been terminated with all assets distributed, while three are likely to remain with small cash balances due to “some exposure” to ASF, the letter said.
“Since our last [letter to members], the Acting Trustee has received approximately $15 million from The Trust Company from the 10 funds for which it is [RE],” it said.
“Of those 10 funds, seven have now been effectively finalised or terminated with all assets distributed.
“In relation to the remaining three funds, being diversified funds with some exposure to the ASF, it has been agreed that these funds should remain in existence with small cash balances whilst the Trio liquidators consider potential recovery actions in relation to ASF.”
ACT Super Management director Mike Hill was unable to provide further details when contacted by InvestorDaily. A representative from PPB Advisory was unavailable for comment.
Meanwhile, the letter said no return will be made to unsecured creditors or shareholders in another of Trio’s other underlying investments, property development company Ualan.
However, following public examinations of former Trio directors and employees and related parties, ACT Super has begun preparing an application for financial assistance under Part 23 of the Superannuation Industry Supervision (SIS) Act 1993.
In terms of Trio’s third underlying investment, Millhouse, the letter said ACT Super “continues to liaise” with the liquidator of the German bio-medical and technology companies.
It said attempts have been made to sell “the most significant” investment being a 100 per cent ownership of Condant, a German IT company. However, circumstances in Europe have prevented a sale, with the letter stating “it is unlikely that a sale will occur in the short-term.”
A sale of the group’s other significant investment, a 14 per cent holding in Revotar, a biopharmaceutical company, have also been unsuccessful, it said.
In terms of distribution of compensation monies to Trio members, the letter said to date more than $200 million has been paid to members.
“Given the significant administrative processes involved in making a distribution, it has been decided to combine the next distribution of the unimpaired assets with any additional grant of financial assistance awarded in relation to ASF,” the letter said.
“Accordingly, the timing of this distribution will be dependent on the timing of the award of any further grant of financial assistance.”
In May, ACT Super made a further application to the Minister for Financial Services and Superannuation Bill Shorten for a grant of financial assistance in respect of the funds’ losses from exposure to the ASF.
“Since that time, we have been providing further information in support of that application,” the letter said.
The letter said ACT Super’s application “largely covers” the additional costs of the acting “trusteeships, arising from the exposure to the ASF, through to their expected completion.
“As a result, to the extent that a further grant is made, all members should receive the benefit of the grant. It is not possible to estimate the timeframe within which the Minister will make a determination in relation to this application.
“In the meantime, we will continue to liaise with APRA (Australian Prudential Regulation Authority) in relation to the application.”
In April 2011, the government granted $55 million in financial assistance to benefit the members of four superannuation funds that were formerly under the trusteeship of Trio.
The assistance to the trustee, granted under Part 23 of the SIS Act, was for the Astarra Superannuation Plan, the Astarra Personal Pension Plan, the My Retirement Plan and the Employers Federation of NSW Superannuation Plan (the superannuation funds).
