Embattled fund manager's licence suspended
ASIC moves on LM Investment Management.
Australia's corporate regulator ASIC has moved on the manager of a Kiwi-favoured Australian mortgage fund, suspending its licence for two years.
LM Investment Management, established by Kiwi-born Peter Drake and which ran eight mortgage funds and operated in 70 countries, including New Zealand, went into voluntary administration last month.
In a statement issued last night, ASIC said the administrators can still provide financial services for the funds, such as transferring them to a new responsible entity, investigating or preserving the assets or winding up the registered managed investment schemes operated by LM.
"ASIC is continuing its inquiries in relation to the conduct of LM and will make no further comment at this time," the statement said.
Australian reports say the suspension means administrators FTI Consulting are unable to hand the business back to LM's directors, as previously suggested.
Embattled LM's bid to keep afloat started to unravel early last month after an Australian television documentary accused LM of selling itself overseas as "bank-like", sparking interest from ASIC.
FTI Consulting – which has raised issues with related-party lending within LM – has reportedly applied to Queensland's Supreme Court to become receivers.
LM funnelled millions of dollars from investors, including New Zealanders, to fund Australian property developments.
When the global financial crisis hit most of the funds were frozen, denying investors access to their money.
Last month, LM advised the unit price is worth about A55 cents to the dollar.
David Williams
Wed, 10 Apr 2013
Wed, 10 Apr 2013
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Embattled fund manager's licence suspended
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