Legal issues, finance delay Trio distribution

Release of money to members of a Trio Capital-linked investment fund delayed.

29-Apr-2014

By Kate Kachor

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Unresolved legal battles coupled with a lack of government-backed financial assistance have delayed a release of money to members of a Trio Capital-linked investment fund.

The anticipated distribution to Ualan-associated investment fund investors would now not proceed due to an outstanding potential claim involving Australia and New Zealand Banking Group (ANZ) and its wealth arm, OnePath, ACT Super Management said in a statement to members.

ACT Super had hoped to make a distribution to members of the funds in the first quarter of 2014 following the resolution of a St George claim.

In September last year, ACT Super finalised a settlement with St George Bank over a multi-million-dollar shortfall of funds associated with the collapse of property investment Ualan Carey Bay (UCB).

ACT Super withheld a portion of funds from members of five funds previously under Trio’s management, which had exposure to UCB’s parent entity and failed property developer Ualan Property Holdings. The cash had been withheld since 2009 to cover potential St George claims.

As a result of the undisclosed settlement, fund members would receive a distribution of funds in 2014.

“ACT Super will review the funds’ ability to make a further distribution to members once the outcomes of the ANZ/OnePath claim and part 23 application for financial assistance are known,” ACT Super said in the statement dated 17 April.

“In the event that a further payment can be made following resolution of these matters, this will be made as soon as possible thereafter.”

The second banking claim, made by Perpetual and OnePath, remained unresolved, it said.

“In relation to the remaining claim against the funds, notified by Perpetual/ANZ (OnePath), ACT Super is continuing to resist this claim and is seeking to settle the matter,” it said.

“Although ACT Super had hoped to settle this matter in early 2014, it is yet to be resolved.”

The statutory limit for when a claim could be made could be up to 12 years, it said.

Perpetual/ANZ’s claim arose following a shortfall to the lender from the sale of a Ualan Property development in Somersby, New South Wales.

The outstanding application for part 23 government-backed financial assistance had also caused the distribution to stall, ACT Super said.

“As members are aware, the acting trustee is pursuing a part 23 application for a grant of financial assistance in relation to the losses sustained by the funds from their investment into Ualan,” it said.

“Following further dialogue with APRA (Australian Prudential Regulation Authority) in relation to the interpretation of fraudulent conduct as contemplated by part 23 of the [Superannuation Industry (Supervision)] Act, ACT Super has redrafted the application and recently submitted a revised final draft of the application to APRA for its consideration.”

Trio collapsed in October 2009 with estimated losses of about $123 million.

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