Insolvency: ASIC winds up "fundraising arm" of Gold Coast developer

A fifth company, Bricks and Mortar Ltd was deregistered by ASIC in May this year. The companies were part of a larger group called the IC Group which "operated under the management and control of Susanne Rae Percival," says ASIC. Percival was declared bankrupt in November 2009.

The companies wound up on the 23rd August 2010 raised funds from retail investors who were offered 15 to 20 per cent per annum in interest payments through unsecured loan contracts. Bricks and Mortar Ltd had raised funds from investors through the offer of redeemable preference shares offering similar returns.

ASIC provides the following background:

Between May 2002 and September 2008 the IC Group investment companies raised over AUD20 million from at least 500 investors. In each case investors were encouraged to invest funds into the companies on the basis that their funds were to be on-lent to particular related property development companies at a higher interest rate. Returns to investors relied upon the related property development companies generating sufficient returns and profits to meet their loan commitments to the investment companies. From about 2008, many of the property development companies experienced financial difficulties, resulting in the appointment of receivers and the forced sale of their development properties to satisfy debts to their principal financier, the National Australia Bank. Once the development companies were unable to meet their commitments to the investment companies, the investment companies were unable to meet their commitments to investors and the companies became insolvent.The IC Group investment companies have since remained inactive, allegedly insolvent with no active directors, registered office or place of business. ASIC intervened to ensure the companies were wound up in an orderly fashion, so the interests of investors and creditors could be properly attended to.