Court orders WA property scheme to end

The Federal Court of Australia has ordered the appointment of an independent accountant to wind up unregistered management schemes operated by Perth property developers Kenneth and Morag Fraser and associated companies.

The court order follows injunctions obtained by the Australian Securities and Investments Commission in April to prevent The Project Managers Pty Ltd, Kenneth Fraser, Morag Fraser and five companies associated with the Frasers to prevent them from promoting and operating nine land subdivision schemes in Western Australia.

ASIC alleges that between June 2006 and July 2007, Frasers-The Project Managers Pty Ltd offered clients the opportunity to invest in schemes for the purchase and subdivision of rural land into residential lots adjacent to Perth.

ASIC alleges that investors paid an expression of interest fee and in some cases a deposit, and that this money was pooled and used in relation to the schemes.

The court order was not opposed by the property developers.

A copy of the ASIC statement is pasted below:

Federal Court orders the winding up of four WA property development schemes

On Wednesday 4 June 2008, the Federal Court of Australia, Perth ordered the appointment of an independent accountant to oversee four property development schemes operating in Western Australia following an application made by ASIC.

ASIC alleges that the schemes have been promoted and operated by Frasers-The Project Managers Pty Ltd, Kenneth Fraser, Morag Fraser and companies associated with the Frasers as unregistered managed investment schemes. ASIC alleges that the schemes that are the subject of the Court's orders involve approximately 48 investors and $3.7 million of investors' funds.

ASIC made the application as part of its efforts to preserve scheme assets for the benefit of investors. The orders made by the Court were not opposed by Frasers-The Project Managers Pty Ltd or other relevant defendants.

The four schemes the subjects of the Court's orders are:
- The Project at Baldivis, comprising the development at Lot 515 Sabrina Road, Baldivis;
- The Project at Baldivis, comprising the development at proposed Lot 41 of Lot 515 Sabrina Road, Baldivis;
- 10 Holmes Forrestfield Development, comprising the development at Lot 10 Holmes Road, Forrestfield; and
- 3 Anderson Forrestfield Development, comprising the development at Lot 3 Anderson Road, Forrestfield.

The Federal Court appointed Brian McMaster of KordaMentha to the role of independent accountant to oversee the winding up of the schemes in accordance with section 601EE of the Corporations Act 2001.

The interim injunctions previously made by the Federal Court on 10 April 2008 remain in force (refer to Media Release 08-74: ASIC acts to prevent detriment to investors in WA land schemes). The matter will return to the Federal Court for further directions on 24 July 2008.

'ASIC is keen to have an independent person take charge of the developments to ensure that investors are provided with transparency and clarity regarding their investments and can be assured that the information they are receiving is accurate,' said ASIC's Executive Director of Enforcement, Ms Jan Redfern.

'While these are winding up orders, the independent accountant will be able to assess what options are available and communicate with investors as to the most appropriate way forward to ensure maximum returns.'