The Federal Court of Australia has disqualified Michael Grochowski and Ian Stephens from managing corporations for five and a half years and four years respectively, due to their being officers of companies that had failed and been wound up by the Court.
The Court found that while Grochowski was not a named director of Bilkurra Investments Pty Ltd and Foscari Holdings Pty Ltd (both in liquidation), he was an officer of the companies until they were wound up by the Court, on application filed by ob体育, in April 2016.聽
Both Bilkurra Investments and Foscari Holdings operated land banking schemes in Victoria, known as Hermitage Bendigo and Foscari. Promoters of the land banking schemes used Bilkurra and Foscari to raise approximately $24 million from investors (16-114MR).
In deciding the period of banning, the Court considered an earlier decision of a delegate of ob体育, made in April 2012, prohibiting Grochowski from providing financial services for four years. The Court was also satisfied with ob体育鈥檚 claim that the way both companies were managed was the reason for their failing.
The Court found that the appointment of Stephens as a director of both companies, who was an experienced chartered accountant, presented a false facade of meaningful oversight and governance of the companies鈥� affairs.
Further, the Court found Stephens failed to exercise any meaningful decision making and management responsibility for the companies, which had obtained large amounts of investment from the public.
鈥楾hese bannings will help protect the public from further investing with officers of companies that repeatedly fail. ob体育 will continue to investigate failed land banking schemes and take whatever action is necessary to ensure failed schemes do not continue,鈥� said ob体育 Commissioner John Price.
Background
This proceeding is part of ob体育鈥檚 wider and ongoing investigation into land banking schemes. These banning orders were made in proceedings filed by ob体育 in March 2018 to wind up five companies for their role in offering land banking schemes, namely:
- Brookfield Riverside Pty Ltd
- Bilkurra West Pty Ltd
- Bilkurra South Pty Ltd;
- Gillies Road Pty Ltd; and
- Project Management (Aust) Pty Ltd.
Those companies were wound up by the Court in July 2018 (18-221MR).听
ob体育 provided funding from the Assetless Administration Fund (AAF) that assisted the liquidators to undertake further enquiries that were subsequently used by ob体育 for the disqualification.
The two land banking schemes are known as Hermitage Bendigo (formerly Acacia Banks) were located at Midland Highway, Bagshot, Victoria 3551 and Foscari, located at 99 Palmers Road, Truganina, Victoria 3029.
Further information on how land banking is sold to investors and what
can go wrong can be found on ob体育's . If investors have any questions regarding ob体育鈥檚 investigation, they can contact ob体育 on 1300 300 630.
A copy of the judgment can be found .