A NEW South Wales Supreme Court judge ordered the winding up of the Astarra Strategic Fund and four other Trio Capital funds yesterday, criticising the funds' former managers and their use of offshore tax havens.
Judge George Palmer approved administrator PPB's application to wind up Astarra Strategic, ARP Growth, Astarra Overseas Equities Pool (AOEP), Astarr Wholesale Portfolio Services (AWPS) and Astarr Portfolio Services (APS).
In other developments, Global Consultants and Services Ltd (GCSL), its chief executive, Jack Flader, and former operations manager Marty Cohen this week sought to block a subpoena by PPB for documents from the Australian Securities and Investments Commission.
Astarra Strategic Fund has been investigated after it emerged $123 million has been invested through tax havens, with Hong Kong-based GCSL acting as a custodian.
Justice Palmer said he would publish reasons for yesterday's orders, ''bringing to the attention of the investing public the danger of investing in schemes which are not utterly transparent and utterly transparently managed by reputable and reliable responsible entities''.
BusinessDay has previously reported fraud fears surrounding $58.6 million invested in ARP Growth after revealing two sets of accounts for the fund's major investment.
AOEP has about $9 million in reported assets. APS has about $4.1 million in reported assets, almost all invested in AWPS, which has about $63.4 million in reported assets. PPB submitted to the court that the funds are illiquid, with difficulties recovering the reported values.
Justice Palmer has ordered the funds be wound up after finding some funds were apparently insolvent, cross investments between the funds and the insolvency of Trio Capital as responsible entity for the funds.
''I'm disturbed to read in the summary of facts that so much of the funds have been channelled through entities registered in the British Virgin Islands, Cayman Islands, St Lucia, Belize - all hallmarks of an endeavour to avoid scrutiny in the plain light of day,'' Justice Palmer said. He also appeared to criticise regulatory action on the funds to date, saying: ''That [warning] really has to be emphasised by the courts if no one else is going to do it.''
Yesterday BusinessDay wrongly reported ASIC sought to block PPB's access to documents. Instead, Mr Flader and Mr Cohen are arguing it is in the public interest not to give PPB evidence they have provided to Hong Kong regulators, then passed to ASIC, as it could undermine investigations.
A hearing has been set for GCSL to contest PPB's subpoena.
