The Australian Securities and Investments Commission (ASIC) has commenced civil proceedings in the Federal Court against Perth-based MKS Property Investments/Developments Pty Ltd (MKS Property) and Paradise Property Group Pty Ltd (Paradise Property), as well as four people related to these companies: Monica Kaur, Sadu Singh, Melvin Paul Singh and Stephanie Lee.
According to the regulator, it is concerned that Ms Kaur had been providing unlicensed financial advice services and that she, together with the other defendants, were involved in “promoting and operating an unregistered managed investment scheme”.
ASIC alleges the defendants raised at least $11.3 million from around 300 investors during the period 1 March 2017 to 22 September 2020 through MKS Property.
It alleges that investors were encouraged to establish a self-managed superannuation fund (SMSF) and invest part or all of their SMSFs or other funds into property investments and developments set up by MKS Property and/or Paradise Property. These funds were then expected to be pooled together to invest in property development.
ASIC also alleges the defendants used investor funds, at least in part, for their own personal use and to pay returns to investors.
Timeline of the action taken
While ASIC’s investigation is ongoing, earlier this month (16 December), ASIC obtained urgent interim orders to restrain the defendants from removing their assets from Australia, disposing of their property, and freezing monies in their bank accounts.
The orders also prevent Ms Kaur, Mr Singh and Mr Melvin Singh from leaving Australia.
The following day (17 December), ASIC and the Australian Federal Police executed search warrants on a residential premise and business premises.
Last week (22 December 2020), the parties agreed that the asset and travel restraint orders regarding the defendants should continue with slight variation until further order of the court.
“This matter demonstrates ASIC’s readiness to take urgent action to protect superannuation consumers in the current COVID-19 environment,” the regulator said.
It urged anyone with information on the defendants to contact ASIC.
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.