This article is from the Australian Property Journal archive
ASIC has wound up Melbourne-based Aviation 3030 Pty, citing a “justifiable lack of confidence” in its directors, just days after the company’s $140 million sale of a Point Cook development site to Shanghai-based Dahua Group was made public.
The Federal Court also ordered the winding up of what it deemed to be an unregistered managed investment scheme operated by Aviation through five separate trusts, as well as trustee companies that were also used to raise funds for the Aviation scheme.
Aviation acquired the 98.4-hectare Aviation Road site in Point Cook for $7.8 million in 2011, with a view to rezoning the property to increase its value, before raising around $10.59 million from approximately 73 shareholders and unitholders.
The site was rezoned from Green Wedge Zone to Farming in 2012 and significantly increased in value, and in March 2016, Aviation issued 63% of its share capital to companies associated with the directors of Aviation.
The sale to Dahua was made on 25 October last year, one month after ASIC commenced proceedings.
“ASIC has targeted and wound up a number of land banking schemes due to concerns they are operating outside the law. ASIC will continue to scrutinise investment schemes suspected of operating outside of the managed investment scheme legislative regime.”
In handing down the decision, Justice O’Callaghan stated, “[T]he case that ASIC makes to wind up Aviation is an overwhelming one…[D]irectors have issued to themselves and to their associates large numbers of shares at a gross undervalue; they have fabricated correspondence and invoices; they have provided false instructions to the company’s external solicitors; they duped and misled investors; they entered into related party loans; and they made unauthorised and exorbitant expenditures.
“The audacity of the March 2016 share issue alone could well be enough to warrant a winding up order, but it is not necessary to decide the case on that sole basis because of the many and varied ways that the directors have demonstrated that they are unfit to sit on the board of Aviation.”
Fairfax reported that Aviation 3030 was led by Hakly Lao, who was behind VKK Investments Unit Trust. That was wound up in April, also deemed to be an illegal managed investment scheme, having raised $22 million from 125 investors that was put towards an 86-hectare site in Melbourne’s south-eastern suburb of Keysborough.
Australian Property Journal
