Federal Court appoints liquidators to UGC-related property fund

The Federal Court has made orders for Global Capital Property Fund Limited (GCPF) to be wound up on “just and equitable grounds”, appointing Ross Blakely and Kelly-Anne Trenfield of FTI Consulting as liquidators.

The Australian Securities and Investments Commission (ASIC) applied for the winding-up of GCPF as it said it holds numerous concerns about the management of GCPF’s business.

On 20 June 2024, ASIC obtained interim orders from the Federal Court freezing the assets of GCPF and related financial advice licensee United Global Capital Pty Ltd (UGC).

The court subsequently discharged the freezing orders against UGC following the appointment of a liquidator to that company and on 1 October 2024, dismissed the proceeding against UGC by consent.

On 9 September 2024, ASIC filed an amended application seeking orders including the appointment of liquidators to GCPF. GCPF consented to the liquidators’ appointment.

At a hearing on Thursday, the court appointed liquidators to GCPF and varied the freezing orders to allow the liquidators to take any action regarding GCPF’s property.

UGC operated a financial advice business holding an AFSL with Joel Hewish its sole director and key person on the licence. GCPF has been an authorised representative of UGC since 25 March 2020.

ASIC made interim stop orders on 5 and 21 July preventing the offer of shares to retail investors under GCPF’s prospectus as well as further interim stop orders on 29 August and 13 September 2022 preventing the issue of shares due to a deficient target market determination.

On 3 June 2024, as a result of ASIC’s investigation into UGC, ASIC cancelled UGC’s Australian Financial Services Licence (AFSL). Additionally, ASIC made an order under sections 920A and 920B of the Corporations Act banning Hewish for 10 years from involvement in a financial services business.

Hewish has applied to the Administrative Appeals Tribunal for a review of the banning decision.

On 5 July 2024, UGC entered voluntary administration and on 9 August 2024. UGC’s creditors resolved to wind-up UGC and appoint David Stimpson of SV Partners as liquidator.

ASIC said its investigation into UGC and GCPF is “continuing”.

Speaking with ifa in September, Financial Advice Association Australia (FAAA) general manager policy, advocacy and standards, Phil Anderson explained that a situation like UGC is the most concerning due to the similarities with Dixon.

“We’ve been worried about these vertically integrated groups like Dixon Advisory and UGC, which were doing the same thing, and then it’s linking that to something that goes horribly wrong,” he said.