The Federal Court has ordered that unlicensed financial advisor Monica Kaur be permanently restrained from carrying on a financial business and that her unregistered managed investment scheme be wound up.
Ms Kaur and her husband, Sadu Singh, were directors at various times of MKS Property Investments/Developments Pty Ltd (MKS Property).
Between March 2017 and December 2020, Ms Kaur and MKS Property encouraged around 300 investors to establish self-managed superannuation funds (SMSFs) and advised them to invest in property investments and developments set up by MKS Property. The Court found both Ms Kaur and MKS Property operated an unregistered managed investment scheme without a licence or the required registration.
ASIC Executive Director Financial Services Enforcement Tim Mullaly said, 'ASIC is actively engaging with industry and consumer advocacy groups to raise awareness about the risks associated with unlicensed advisors and providing guidance on identifying legitimate financial professionals.
'ASIC is committed to safeguarding the interests of consumers and upholding the integrity of the financial services sector, sending a clear message that unlicensed practices will not be tolerated,' concluded Mr Mullaly.
The Court further found that by deferring all matters regarding the affairs of MKS Property to Ms Kaur, Mr Sadu Singh breached his directors' duties by failing to exercise his powers and discharge those duties with the degree of care and diligence that a reasonable person would exercise.
The Court ordered that Ms Kaur be permanently restrained from carrying on a financial services business in Australia and operating an unregistered managed investment scheme.
Ms Kaur has been disqualified from managing corporations for life and Mr Singh has been disqualified for 15 years.
In handing down his decision, Justice Jackson said, 'The venture into which Ms Kaur directed investor funds was risky and speculative as is shown by the likelihood that most if not all of the funds of many of the investors have been lost. Inadequate record keeping and a lack of controls over what was done with the funds are likely to exacerbate the losses and the difficulty of making any recovery on behalf of investors. The losses are going to be in the millions of dollars and are likely to impact on the retirement savings of many individuals.'
MKS property will now be wound up. Mr Hodgson and Mr Hewitt of Grant Thornton were appointed as receivers of the property of Ms Kaur, Mr Singh and the Scheme and as liquidators of the Scheme and MKS Property.
