The Supreme Court of Queensland has ordered that a number of unregistered managed investment schemes and foreign companies not registered in Australia be wound up following an investigation by the Australian Securities and Investments Commission (ASIC).

The schemes and foreign companies ordered to be wound up are:

• The Carsworthy Scheme
• The Edwardian Associates Scheme
• One Accord Trading Services Pty Limited (Australian-registered company)
• Carsworthy Limited (Mauritius-registered company)
• Edwardian Associates Limited (domiciled in Western Samoa)
• Coppertone Investments Limited (Mauritius-registered company)

The Supreme Court appointed Mr Ian Richard Hall and Mr Martin Russell Brown of PricewaterhouseCoopers in Brisbane as receivers and managers of the Carsworthy and the Edwardian Associates Schemes, as well as liquidators of each of the foreign companies.

The Supreme Court also prohibited Mr Arthur James Robinson from withdrawing, transferring or otherwise dealing with any funds held in specified bank accounts. Mr Robinson and Mr Peter Anthony Edwards are directors of One Accord Trading Services. Mr Edwards is a director of the foreign companies.

‘ASIC has taken this action to ensure that all investment schemes operating in Australia are run according to the requirements of Australian law. ASIC will take action to wind up any schemes which may be run illegally, in order to realise any potential returns to investors’, ASIC Deputy Executive Director of Enforcement, Mr Mark Steward said.

ASIC’s investigation is continuing.

Background

Many of the investors, who are located across Australia, became involved with the schemes after attending investment meetings held offshore.

The Carsworthy Scheme

Approximately 220 people invested AU$2.4 million in the Carsworthy scheme.

Investors in the scheme borrowed the retail price for a new car, but received a discount on the actual purchase, with the discounted amount being invested in one of the schemes. Investors were told that the money was ‘capital guaranteed’ and was to be used as trading collateral for the bank trading program known as ‘fractional reserve banking.

Investors were required to make the first four loan repayments, after which the returns from their investment would fund the balance of the loan repayments. However, after only a few loan repayments, the Carsworthy Scheme ceased making payments.

One Accord Trading Services Pty Limited and Carsworthy Limited, a foreign company, are connected with the Carsworthy Scheme.

The Edwardian Associates Scheme

Unlike the Carsworthy Scheme, investors in the Edwardian Associates Scheme loaned the money for a period of 12 months and 90 days. Investors were told that there would be no interest payable for the first 90 days, after which they would receive a minimum of 7 per cent per annum, with a promise by the borrower to ‘use its best efforts to conduct its business in such a manner as to pay the lender interest at a higher rate’.

At least US$8 million was paid into the scheme.

Some investors received returns but overall there are some millions of dollars of investors’ funds that have not been repaid.

Edwardian Associates Limited is a foreign company associated with the Edwardian Associates Scheme.

Coppertone Investments Limited

Within a 12-month period, more than 220 Australian investors paid a total of almost AU$5 million for shares in Coppertone Investment Limited. The offers to purchase the shares were made without a disclosure document having been lodged with ASIC.