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Director faces jail for dishonest handling of $500k in SMSFs

Regulation

The lure of “property developments” persuaded investors to set up SMSFs then move funds into two companies controlled by the director.

By Philip King 9 minute read

A former director faces up to 15 years’ jail after pleading guilty to charges of dishonestly persuading investors to channel more than $500,000 in SMSF savings to companies run by him.

Mr Mudasir Mohammed Naseeruddin pleaded guilty to two counts of dishonest conduct and two counts of failing to discharge his duties as a director in the best interests of a company.

Mr Naseeruddin encouraged investors to roll over their superannuation monies into newly created SMSFs and to lend those funds to his two companies, Secure Investments and Aquila Group.

Mr Naseeruddin, who was a director of both companies, dishonestly obtained more than $520,000 from six investors between May 2015 and January 2020 on the basis that the funds would be invested in property developments

Only a small portion of their funds was invested this way.

Between July 2016 and December 2019, Mr Naseeruddin used his position as a director of Secure Investments to withdraw over $550,000 from the company to purchase shares in a security company for his own benefit.

The matter is being prosecuted by the Commonwealth Director of Public Prosecutions following an investigation and referral by ASIC and returns to court on 6 December 2023 for a plea hearing.

Mr Naseeruddin was arrested and charged with dishonest conduct and misuse of his position as a director in December 2020 after ASIC took civil action to obtain interim orders to preserve the assets of Mr Naseeruddin’s two companies.

In October 2020, ASIC obtained orders to wind up Mr Naseeruddin’s companies and declarations that Mr Naseeruddin had operated a financial services business without the appropriate licence.

The maximum penalty for the offence of dishonest conduct while carrying on a financial services business, contrary to section 1041G of the Corporations Act 2001 (Cth), is 10 years imprisonment for offences committed up to and including 12 March 2019 and 15 years imprisonment for offences committed on or after 13 March 2019.

The maximum penalty for a breach of directors’ duties, contrary to section 184(2) of the Corporations Act 2001 (Cth), is five years imprisonment for offences committed up to and including 12 March 2019 and 15 years imprisonment for offences committed on or after 13 March 2019.

 

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Philip King

Philip King

AUTHOR

Philip King is editor of Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors.

Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines.

You can email Philip on: This email address is being protected from spambots. You need JavaScript enabled to view it.

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