The trustees embroiled in a super fund scandal that saw Aussies lose millions of dollars have urged the government to repay investors a whopping $600million.
In March, The First Guardian Master Fund was placed into liquidation after corporate watchdog ASIC obtained a Federal Court order to freeze its assets.
ASIC also blocked investment in Shield Master Fund, with liquidators notifying investors in April that the super fund had been terminated.
Some 12,000 Aussies have been left devastated after investing $590million into the super fund – retirement money they fear is lost for good.
On Monday, one of the trustees for First Guardian Master Fund confirmed it has called on the Albanese government to step in and repay its investors.
Netwealth submitted an application to Financial Service Minister Daniel Mulino for financial assistance via the Superannuation Industry Supervision Act.
Part 23 of the act allows the government to provide financial assistance to a super fund if the fund has suffered losses due to fraudulent conduct or theft.
For the super fund to be eligible, it must show that the losses have made it difficult to pay benefits to its members and that the assistance is in the public interest.
Netwealth has submitted an application to the government for financial assistance after members lost $101million following the collapse of First Guardian Master Fund (pictured Netwealth’s Michael Heine and son Matt Heine)
Some 12,000 Aussies have been left devastated after investing $590million into the super fund – retirement money they fear is lost for good (stock)
Of those affected by the First Guardian fund collapse, 1,088 Aussies invested about $101million in the fund through Netwealth.
Netwealth’s application hopes the government will provide enough financial assistance to help members restore their funds to the amount prior to the fraud.
However, they have cautioned their members that there might be a shortfall between the government assistance and their losses.
‘Netwealth considers the responsible entity of First Guardian, Falcon Capital, has engaged in fraudulent conduct and that the Netwealth Superannuation Master Fund has suffered a loss as a result of that conduct,’ Netwealth told investors in a letter seen by The Australian.
‘Should a grant of financial assistance be made, the proceeds will be applied to restore the fund and to compensate members.
‘Even if financial assistance is provided (by the government), it may only compensate members for a portion of the losses they have suffered.’
It comes after creditor reports found fund directors had spent members’ money on Lamborghinis, luxury homes and escapes overseas.
First Guardian Master Fund director David Anderson was accused of moving $242million in funds offshore.
Director of First Guardian Master Fund’s parent company, Falcon Capital, David Anderson (pictured) was accused of moving $242million in funds offshore
A creditor report also showed Mr Anderson had bought a $9million mansion in Melbourne in 2020.
Director of First Guardian Master Fund’s parent company, Falcon Capital, Simon Selimaj also used company funds to buy a $548,000 Lamborghini Urus SUV.
Meanwhile, Melbourne-based financial adviser Ferras Merhi faced court this week accused of encouraging thousands of his firm’s clients to invest in the failed funds.
Mr Merhi was also accused of failing to declare interests in a business which took millions of dollars linked to the collapsed superannuation funds.
ASIC claimed Cayman Islands firm NexOasis Consulting Inc. had ‘substantial inflows of funds from companies connected to investments made by the First Guardian Master Fund’ to the tune of about $US9.6million (AU$14.8million).
Mr Merhi is also accused of pocketing tens of millions of dollars in fees and benefits for advising his clients to invest in the two collapsed superannuation funds.
ASIC has previously alleged Mr Merhi engaged in ‘unconscionable conduct,’ failed to act in the best interests of clients, gave conflicted advice, and issued defective statements of advice.
The corporate regulator said at least 5,800 Aussies had also invested about $480million with Shield Master Fund since February 2022.
Financial advisor Ferras Mehri faced court accused of encouraging thousands of his clients to invest in collapsed superannuation funds First Guardian and Shield
Netwealth is the first trustee to make an application to the government for financial assistance in a bid to repay their member’s super savings lost in the collapse.
Thousands more invested in First Nation Guardian Master Fund and Shield Master Fund through platforms hosted by Diversa, Equity Trustees, Macquarie as well as through their self-managed super funds.
Diversa told The Australian it was in the process of making an application with the government for members who lost a total of $286million with First Guardian.
Equity Trustees said it was considering an application after members lost $60million in the First Guardian collapse and $160million to Shield Master Fund.
In September, Macquarie brokered a deal with ASIC and agreed to repay investors $321million for the funds lost in the Shield Master Fund collapse.