Following an application by ASIC, the court appointed liquidators to two companies, Bilkurra Investments Pty Ltd and Foscari Holdings Pty Ltd, which have each operated a land banking scheme in Victoria, ASIC said in a statement last week.
The two land banking schemes are known as Hermitage Bendigo (formerly Acacia Banks) and Foscari.
According to ASIC, promoters of the land banking schemes used Bilkurra and Foscari to raise approximately $24 million from investors.
ASIC said its application was based on concerns that both companies were insolvent. The court agreed, ASIC said, and also found that it was “just and equitable” that the companies be wound up so that liquidators could be appointed.
Nicholas Martin and Craig Crosbie of PPB have been appointed as joint liquidators to Bilkurra and Foscari, and they will take over the day-to-day operations of the companies and realise any assets for the benefit of creditors.
The court further found that Bilkurra and Foscari were knowing participants in schemes that have facilitated misappropriation of investors' funds.
The court also found that the winding-up orders were necessary to protect investors and so that there was “some prospect of recovery of the monies lost after a full investigation by a liquidator”.
Following these proceedings, ASIC has issued a general warning to investors to be “be vigilant” when investing in such schemes.
“Investors should also assess their risk tolerance to this type of scheme and fully understand tax implications of investing through an SMSF,” ASIC stated.
“ASIC notes that many of the promotors of land banking schemes offer access to lawyers and financial advice, but is concerned that they are not independent enough to provide the best advice.”