LM Investment Management Limited

Posted by Expat Investment Fraud on

 

LM managed investment schemes

On 19 March 2013 the directors of LM Investment Management Limited (LM) appointed John Park and Ginette Muller of FTI Consulting as Voluntary Administrators. On 1 August 2013 creditors resolved that LM be wound up and John Park and Ginette Muller of FTI Consulting were appointed as liquidators. The role of the liquidators is to undertake the orderly wind up of LM.

ASIC has suspended the Australian financial services licence of LM: see 13-075MR.

On 7 April 2015 ASIC extended the initial 2-year suspension of LM’s AFS licence until 2 April 2017.

LM is the responsible entity of the following registered managed investment schemes:

  • LM Cash Performance Fund ARSN 087 304 032
  • LM First Mortgage Income Fund ARSN 089 343 288 (FMIF)
  • LM Currency Protected Australian Income Fund ARSN 110 247 875
  • LM Institutional Currency Protected Australian Income Fund ARSN 122 052 868
  • LM Australian Income Fund ARSN 133 497 917
  • LM Australian Structured Products Fund ARSN 149 875 669; and
  • The Australian Retirement Living Fund ARSN 162 406 162.

LM was also the trustee of the unregistered LM Managed Performance Fund (MPF).

LM First Mortgage Income Fund (FMIF)

On 8 August 2013 the Queensland Supreme Court appointed David Whyte of BDO as receiver of the FMIF.

Mr Whyte will effectively have control of the winding up of the FMIF.

Mr Whyte’s appointment followed ASIC’s intervention in court proceedings heard on 15-17 July 2013 in the Queensland Supreme Court (proceeding number 3383/2013).

These proceedings were initially commenced by two unit holders of the FMIF seeking orders for the appointment of Trilogy Funds Management Limited as the new responsible entity of the FMIF. The Court dismissed this application.

ASIC believes that the appointment of a receiver to the FMIF will allow the winding-up to proceed in the most efficient and cost effective way to provide the best chance of achieving the maximum return for investors.

Download the judgement from the Supreme Court of Queensland’s website

On 20 December 2013 the Queensland Supreme Court made orders in relation to the costs of these proceedings. It ordered that:

  1. Trilogy Funds Management Ltd pay 7% of LM’s costs of the proceeding; and
  2. LM is to be indemnified from the FMIF only to the extent of 20% of its costs of the proceeding.

LM also gave an undertaking that it would not seek from the FMIF any costs of or incidental to the investor meeting convened by notice dated 26 April 2013.

Pursuant to court orders, copies of the relevant court documents, can be found at the following website:
www.lminvestmentadministration.com

An appeal filed by LM Investment Management Limited against the decision of Justice Dalton was dismissed by the Court of Appeal (QLD) on 6 June 2014. The Court of Appeal upheld the orders appointing Mr Whyte as receiver of the FMIF.
Download the judgment from the Court of Appeal (QLD) website

LM Managed Performance Fund (MPF)

On 12 April 2013 the Queensland Supreme Court made orders appointing KordaMentha Pty Ltd and Calibre Capital Limited as joint trustees of the MPF.

On 10 February 2014, orders were made directing KordaMentha and Calibre Capital Limited to wind up the MPF.

For investors or creditors of the MPF, relevant court documents can be found on KordaMentha’s website.

Ongoing status of schemes and additional information

ASIC has been and will continue to liaise with the external administrators and monitor the current status of the managed investment schemes LM operated.

In September 2013 following an application by ASIC, the Supreme Court of Queensland ordered the surrender of the passport of LM’s founder Peter Drake, restrained his travel out of Australia without the prior consent of the Court, and froze his assets. William Fletcher and Tracey Knight of Bentleys were appointed as receivers of Mr Drake’s property: see 13-266MR.

In November 2014 ASIC started legal action against Peter Drake, and former directors, seeking financial penalties and banning orders.

ASIC’s civil penalty proceedings in the Federal Court of Australia are against Mr Drake, Francene Maree Mulder, Eghard van der Hoven, Simon Jeremy Tickner, and Lisa Maree Darcy.

ASIC alleges Mr Drake used his position to gain an advantage for himself and the former directors breached their director’s duties for failing to act with the proper degree of care and diligence regarding transactions involving the MPF: see 14-308MR.

The trial against the former directors commenced on 29 August 2016 in the Federal Court at Brisbane and is due to conclude on 23 September 2016.

On 12 September 2016, after the close of its case, ASIC’s proceedings against the fourth and fifth respondents was dismissed by consent. 

On 23 December 2016, the Court found that Peter Charles Drake, Francene Maree Mulder and Eghard van der Hoven did not breach their duties as directors of LM Investment Management Ltd (LMIM): see MR 16-461.

We will provide updates on our website on matters affecting investors as public information becomes available. Consistent with our policy in relation to investigations we are not at this stage in a position to comment further publicly.

Contact details

Investors seeking information about LM and its schemes should contact the appropriate external administrators directly:

FTI Consulting (LM and schemes other than FMIF and MPF

BDO (FMIF)

Investors seeking information about the LM Managed Performance Fund should contact the trustees directly:

KordaMentha (the Trustees)

Creditors seeking information about LM Administration Pty Ltd (In liquidation) (LMA) should contact the liquidators directly:

David Clout & Associates

Investors can also access additional information in relation to the process of winding up on www.asic.gov.au/insolvency-investors.

If you received advice from a financial adviser

If as an investor you have received advice from an Australian financial adviser in relation to your investment and have a complaint in relation to the advice provided you may wish to consider lodging a complaint with the relevant adviser’s External Dispute Resolution Scheme.

You can access additional information about how to complain on ASIC’s MoneySmart website.

If you as an investor received advice from an adviser in another jurisdiction and have a complaint in relation to the advice provided, you may wish contact the regulator in the relevant jurisdiction to discuss whether any further action can be taken.

Taxation inquiries

For any tax-related questions or concerns, please contact the Australian Taxation Office on 131 020.

Trouble with debt

If you are having debt and cash flow issues see trouble with debt on ASIC’s MoneySmart website.

Reporting information to ASIC

To report information to ASIC on LM, please contact ASIC on 1300 300 630 or go to www.asic.gov.au/complain