Five funds formerly managed by failed asset manager Trio Capital will receive nothing back from their $25.5 million investment in collapsed property developer Ualan Property Holdings.
The funds – Astarra Superannuation Plan, Astarra Personal Pension Plan, Employers’ Federation of New South Wales
Superannuation Plan, Astarra Pooled Superannuation Trust and Asttar Wholesale Portfolio Service (AWPS) – invested around $19 million in Ualan shares and loaned $6.5 million to the company before Trio’s licence was suspended in 2009.
ACT Super Management was appointed acting trustee of the four super funds – which own 90 per cent of AWPS – by the Australian Prudential Regulation Authority at the time.
Ualan, through its subsidiary companies, engaged in several property developments on the east coast of Australia and intended to develop vacant land into residential housing estates or apartments.
However, in May 2010, Deloitte was appointed as the voluntary administrator to Ualan, and the company was subsequently put into liquidation.
The liquidator had advised in a report last year that it expected a dividend of 8 cents to 13 cents would be paid to the unsecured creditors of Ualan, which included the funds in respect of the loans made to Ualan.
“The respective developments have now been sold, with the proceeds of the sale of the developments being insufficient to
pay all external third-party secured creditors in full,” ACT Super director Mike Hill said.
“As a result, the liquidators have advised that there will be no dividends paid to unsecured creditors in respect of the loans
made to Ualan by Trio and there will be no return to the Ualan shareholders.”
Hill said ACT Super would examine all potential avenues to recover the investment losses of the funds.
The trustee had obtained orders from the New South Wales Supreme Court to conduct public examinations on 10 individuals in relation to the funds’ investments in Ualan.
“As part of this process, the acting trustee liaised with the liquidators of Trio (PPB), who also wish to conduct examinations of the same individuals,” Hill said.
“As a result, it is anticipated that the examinations will be conducted by both the acting trustee and the Trio liquidators.
“At this stage, it is intended to publicly examine several current and former directors and officers of Trio and Ualan.”
The examinations would be held over two weeks, starting 21 November.
Assistant Treasurer Bill Shorten agreed to compensate fund victims with a $55 million financial assistance package in April.
The package was provided to ACT Super, which is responsible for the equitable distribution to the accounts of affected superannuation fund members with investments in Trio’s hedge fund, the Astarra Strategic Fund.
“The Gillard government considers it vital that members of the community have complete confidence the framework
surrounding superannuation is robust,” Shorten said.
“The events surrounding Trio have cemented my belief that conflicted remuneration structures have no place in financial advice and underscore the need for our Future of Financial Advice reforms, which will be announced soon.”
