ASIC notes the outcome of the second creditors’ meeting of Keystone Asset Management Ltd (Receivers and Managers Appointed) (Administrators Appointed) (KAM) yesterday at which creditors resolved to wind up KAM and appoint Jason Tracy and Glen Kanevsky of Deloitte as joint and several liquidators. KAM is the responsible entity for the Shield Master Fund (Shield).
A number of proposals were put to creditors on Monday 2 December as an alternative to KAM being wound up. Having considered these proposals, the Administrators were of the view that they were not in the best interests of creditors, unitholders or underlying investors in Shield and recommended that KAM be wound up.
ASIC is investigating whether significant investor funds may have been dissipated.
In June 2024, ASIC took action to secure the assets held within Shield (24-129MR). ASIC sought the appointment of Jason Tracy and Lucica Palaghia of Deloitte as receivers and managers of the property of KAM.
ASIC understands that, since February 2022, funds totalling more than $480 million have been invested into Shield by at least 5,800 consumers, who accessed Shield primarily through superannuation platforms, the trustees for which were Macquarie Investment Management Limited and Equity Trustees Superannuation Limited. The investigation to date suggests that potential investors were called by lead generators and referred to personal financial advice providers who advised investors to roll their superannuation assets into a retail choice superannuation fund and then to invest part or all of their superannuation into Shield.
ASIC has taken a range of Court actions in respect of KAM and in seeking orders from the Court, ASIC alleged that:
KAM is the trustee of the Advantage Diversified Property Fund (ADPF), a wholesale property fund into which a large proportion of Shield’s funds has been invested,
the ADPF has made loans to various companies associated with Paul Chiodo (former director of KAM) to fund property development projects in Fiji, Italy, Port Douglas, and Melbourne,
substantial sums appear to have been spent on property developments without written contracts, and in the case of the Port Douglas development, without the requisite development approvals to proceed,
there is a substantial shortfall when comparing the monies invested in the ADPF against the value of the assets of the ADPF, and
investor funds may have been misapplied.
ASIC is investigating the circumstances surrounding Shield. ASIC is investigating KAM and its directors and officers, the role of the superannuation trustees, the financial advisers who recommended investors invest in Shield, the lead generators, and others.
It has come to ASIC’s attention that Venture Egg (a financial adviser who has advised clients to invest in Shield) has issued letters to investors dated 29 November 2024 and 2 December 2024. ASIC is concerned that the information in the letters is incomplete and some of the statements in the letters are inaccurate. Investors who have queries about their investment or the liquidation of KAM should contact the liquidators of KAM at [email protected]. The Administrators’ independent assessment of the proposals put forward as an alternative to the winding up of KAM (which did not secure the support of the majority of creditors of KAM voting on its future) are available on Deloitte’s webpage.