‘Significant shortfalls': First Guardian Master Fund investors warned they may never see their money again
About 6000 Australians have invested $590m into the superannuation fund, which was founded in 2019 as a management investment scheme.
Investors were advised to roll their money into a retail choice super fund, then invest their funds into First Guardian, which was available to investors on the superannuation platforms Equity Trustees, Netwealth and Diversa.
Customers said they were unaware their funds were being transferred to First Guardian Master Fund despite the details being written in the company's legal documents.
The fund collapsed earlier this year, leaving thousands of customers in the lurch and unsure if they will ever see their money again.
FTI Consulting liquidators Paul Harlond and Ross Blakely, who released their preliminary report into the fund, said they 'intend to undertake further investigations', including the determination 'whether any breaches of the Corporations Act or any other laws have occurred by any party … or any other circumstances exist, which may give rise to a potential claim by investors'.
In their report, the liquidators said they were 'seeking compensation on behalf of members of the fund for losses suffered', which could be as high as $446m.
However, they also hold fears investors may never see their funds again.
Their assessment found the 'overall recoverable value of the investments is likely to be considerably less than their combined book value' and a 'substantial shortfall of recoverable assets to outstanding investor funds will therefore likely arise in the liquidation'.
In the report, the liquidators said 'a large proportion of investors in the (First Guardian Master Fund) invested through investment platforms', adding the recovered funds may not be as high as hoped.
' … the liquidators consider the value of the assets may have been overstated in the accounts,' the report read.
'It is very likely that some of the funds' assets/investments are not recoverable or will not recover their full ascribed value. Indeed, significant shortfalls to book values are expected.'
The ABC reports the liquidators noted much of the money invested had gone to 'illiquid investments such as property developments and equity positions in related companies that may have shared a common director with the company'.
The liquidators said it would take 'certainly beyond 12 months' to complete their investigation and wind up the business due to the 'complexity and number of outstanding matters' in the liquidation.
'The liquidators consider that the liquidation and the winding up of the funds will continue for and take some time to complete,' the report read.
Corporate watchdog Australian Securities and Investments Commission (ASIC) confirmed it was launching an investigation.
Falcon Capital Ltd is responsible for the failed superannuation fund, with ASIC investigating its former managing director David Anderson, who allegedly funnelled funds from superannuation members into his failed property developments and craft breweries.
It's alleged Mr Anderson also poured the investor's savings into celebrity chef Scott Pickett's restaurant empire, of which he was an investor, ABC reported last week.
Mr Anderson's assets have been frozen and his passport has been seized as Federal Court-appointed liquidators and investigators sort through financial records.
ABC reported Mr Anderson allegedly moved $274m into offshore companies after he was alerted about the corporate watchdog's probe.
The watchdog alleges $5.6m was deposited into Mr Anderson's ANZ account between June 2022 and September last year 'without any legitimate basis for payments in that amount being apparent to ASIC or disclosed to investors'.
ASIC also alleges Mr Anderson used $16,000 to make mortgage payments on his $9m home overlooking the Yarra River.
Mr Anderson's legal representative, Dan Mackay of Mackay Chapman, told the ABC last week 'there have been no findings of fact or law by any court or tribunal, nor by ASIC'.
'Mr Anderson will fully exercise his rights in response to allegations which may be made against him at the appropriate time in the appropriate forum,' he said.
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