Standard Chartered Singapore implicated in Avestra's laundering of 1 MDB's Cayman funds

by Ganesh Sahatevan 

Standard Chartered Bank Singapore may have assisted in the laundering of 1 MDB's funds by Avestra Asset Management, the small Australian company entrusted with some USD 2 billion of 1 MDB's funds.

The extracts below are from the 2013 Annual Report of the BursaMalaysia listed DVM Technology Bhd   The details are from the analysis of Top 20 Shareholders ,and show details of the registered shareholder and number of shares held.

i) Cartaban Nominees (Asing) Sdn Bhd 

STANDARD CHARTERED BANK SINGAPORE FOR AVESTRA ASSET MANAGEMENT LIMITED (WORBERG GBL FD) 

6,050,000 

ii) Cartaban Nominees (Asing) Sdn Bhd 

STANDARD CHARTERED BANK SINGAPORE FOR AVESTRA ASSET MANAGEMENT LTD ACCELERATOR FUND (MY011777700027)

 2,895,000

Standard Chartered is already the subject of a number of money laundering investigations, some of which have led to mutli-million dollar fines.

The DVM Annual Report also includes this detail:

i)  M & A Nominee (Asing) Sdn Bhd 

SANSTON FINANCIAL GROUP LIMITED FOR AVESTRA ASSET MANAGEMENT LIMITED 2,841,600

Sanston is a Hong Kong based financial services company.

END

ASIC: Avestra ‘diverted cash to tax haven’

• THE AUSTRALIAN
• SEPTEMBER 22, 2015 12:00AM

• 
  

Ben Butler

Margin Call columnist

Melbourne

Seven Mile Beach, Cayman Islands. Picture: Thinkstock Source: Supplied

The corporate watchdog has accused management of Gold Coast funds management group Avestra of diverting investors’ money to unregulated entities in tax haven the Cayman Islands and using fund money to prop up a timber tycoon’s controversial takeover bid for a Malaysian company.

In a blockbuster 200-page Federal Court affidavit, Australian Securities & Investments Com­mission senior investigator Glenn Childs details the regulator’s concerns about failures to disclose related party transactions, potential breaches of takeover laws and the plummeting value of Avestra’s investments.

Mr Childs said he was concerned that Avestra Asset Management executives Paul Rowles and Clay Dempsey “may not be fit to act as the responsible managers” of the company and “investor funds may be at risk”. The company controls about $18.5 million of investors’ money.

Earlier this month, ASIC asked the court to appoint Simon Wallace-Smith and Robert Woods of Deloitte as provisional liquidators of Avestra with a mandate to take control of the 13 funds run by the group.

Justice Jonathan Beach on Thursday ordered the application be heard on October 27.

Avestra has yet to file a defence and its solicitor, Angela Yates of Moray Agnew, declined to comment because the case is before the court.

Mr Childs’s affidavit reveals that Avestra has been the subject of a full-scale ASIC investigation since December 2014.

He alleges Avestra began moving money to the Cayman Islands funds in May last year after ASIC began inquiring into management of its Australian wholesale funds.

Avestra allegedly closed the Australian wholesale funds — Canton, Worberg and Safecrest — and opened equivalents in the tax haven, Bridge Global CMC and Hanhong High Yield.

However, the underlying investments, allegedly dominated by risky punts on Malaysian second-bourse stocks, did not change.

Mr Childs alleges that one of the funds into which investor money was channelled, the Avestra Credit Fund, failed to disclose a series of investments that involved conflicts of interest.

The largest was $US5.4m, about three quarters of the fund’s assets, loaned in May last year to Zenith City Investments, a company registered in tax haven Seychelles and run by Malaysian businessman Eddie Chai.

“The circumstances in which the loan to Zenith was made suggest that it may have been used for an attempt by Zenith and its director (Mr Chai) ... for an attempt to take over the board of Harvest Court Industries ... a company listed on the main market of the Malaysia Bursa,” Mr Childs said.

At the same time, Avestra “itself acquired a significant holding in Harvest Court Industries on behalf of its various schemes”, he added.

Under examination by ASIC, Mr Rowles denied knowing Mr Chai wanted the money to buy more stock in Harvest Court.

Mr Chai succeeded in his takeover bid but it was controversial, sparking a Malaysian High Court case.

http://www.theaustralian.com.au/business/companies/asic-avestra-diverted-cash-to-tax-haven/story-fn91v9q3-1227537657961

Boardroom battle brewing at Harvest Court?

Posted on 17 June 2014 - 05:38am

Lee Weng Khuen
sunbiz@thesundaily.com

Print

 

PETALING JAYA: Datuk Eddie Chai Woon Chet (pix), a major shareholder of Harvest Court Industries Bhd, has come out to deny plans for a mandatory general offer (MGO) of Harvest, but a boardroom tussle looks to be in the offing with Chai vying for control of the company from managing director and CEO Datuk Raymond Chan Boon Siew.

Chai who held a press briefing yesterday to refute Chan's claims of a hostile takeover of the company by him, yesterday seemed to signal a possible change in the management of the company, making reference to the re-election of Chan at Harvest's AGM scheduled for this Friday.

"We will see what happens in the AGM, removal (of Chan through an extraordinary general meeting (EGM) will only be relevant if he (Chan) is re-elected in the AGM ," Chai said of Chan, who has been linked to a number of penny stocks over the years.

Chai through his private vehicle, Zenith City Investment Ltd, has progressively increased its stake in Harvest Court, with a 19.55% stake in Harvest as at June 6, compared with only about 10% a month ago.

Asked whether he will increase his shareholding in Harvest, Chai said: "Not at this moment, (but) anything can happen".

The war of words between Chai and Chan started when Harvest refused to act on Zenith's request to table resolutions to appoint three new directors in the upcoming AGM.

The new appointments include Chai himself, Wong Kwai Wah and Datuk Seri Abdul Azim Mohd Zabidi.

Chai said the proposals were made because he is extremely concerned about Harvest, which had been running at losses under the present management led by Chan.

He also stressed that he has not teamed up with Kenneth Vun, a nother shareholder, as claimed by Chan.

"I have never gotten 33% of Harvest shares. In any event, I personally do not even have a single piece of Harvest shares at the material time. I also stress that I (don't) know whether Vun, as alleged in the announcements, has a 10% (stake) in Harvest.

"In view of the fact that Chan and the directors (have access) to Harvest's shareholder list, it is against common sense and logic for the directors (and) Harvest to make such (an) announcement," Chai said.

Chai said he is extremely surprised and aggrieved that Bursa Malaysia had allowed such defamatory and untrue statements to be circulated.

"In this regard, I have instructed my lawyer to initiate legal action against the respective parties and against each and every directors of Harvest, for actuating such untrue and defamatory statements against me.

"I will also make complaints to the Securities Commission, Bursa Malaysia and Companies Commission of Malaysia (SSM) against each and every director of Harvest. I also wish to remind Chan of his fiduciary duties to the company and shareholder as a managing director," he said.

Even though Harvest is in the red, but Chai sees value in the firm as it has diversified into construction business and is believed to be the right vehicle.

"(Although loss-making) It doesn't mean that the company can't go further, if we have projects in hand, I'm confident I can turnaround the company," he said
Chai is targeting around RM1 billion property developments and construction projects to be injected into Harvest Court if he gets control of the company.

"There are ongoing projects, with my connection…having some deals going on, that's why I'm looking for the right vehicle," he said.

Interestingly Chai, the son of Sabah timber tycoon Tan Sri Chai Kin Kong, has been actively getting involved in penny stocks recently.

Earlier this year Chai emerged as Astral Supreme's executive director and XOX Bhd managing director. Both Astral Supreme and XOX are loss-making.

For the first quarter ended March 31, 2014, Harvest's net loss widened to RM1.3 million from RM816,000 a year ago, after it shut down its timber door section and due to lower sales from the construction division.

Harvest was once in the limelight in 2011 when prime minister's second son Nazifuddin Najib, along with Chan bought into the company. Chan currently owns a 7.05% stake in Harvest.

http://www.thesundaily.my/news/1083675

Over US$2b of 1MDB's Cayman funds managed by Aussie firm

Anita Gabriel , Over US$2b of 1MDB's Cayman funds managed by Aussie firm

726 words

22 November 2014

Business Times Singapore

STBT

English

(c) 2014 Singapore Press Holdings Limited

Avestra shares several executives with Bridge Global, whose fund 1MDB has invested in

Singapore

AUSTRALIAN firm Avestra Asset Management has been managing over US$2 billion of 1Malaysia Development Bhd's monies invested in several Cayman Islands funds.

The Business Times understands that 1MDB's investments via several segregated portfolio companies (SPCs) in the CaymanIslands called Bridge Global Absolute Return Fund are now managed by Queensland-based Avestra.

This is not known by many because the controversial Malaysian strategic fund, which is sprucing up its energy assets for a massive US$3 billion initial public offering sometime in the first quarter of next year, has not provided details on the funds or the names of the fund manager, although it has long been under pressure to do so for the sake of transparency.

It is not clear how and when Avestra emerged in the picture as investment adviser of the funds under Bridge Global. BT's numerous attempts to contact Avestra's top executives and 1MDB drew a blank.

These funds - some 60 per cent of which have reportedly returned to Malaysia recently - were invested by the state-backed fund through Brazen Sky Ltd - a wholly owned unit incorporated in the British Virgin Islands (BVI).

According to Avestra's website, the asset management firm operates in Australia and Asia with research and marketing facilities in Hong Kong, Singapore and Malaysia.

There are several common individuals on the management line-up of Avestra and Bridge Global - Paul Rowles, who established the Avestra Group in 2004, Jason Dixon and Nick McDonald. Several attempts to reach Mr Rowles were also unsuccessful.

Bridge Global, according to its website, has over US$2.5 billion under management and to date, has launched nine segregated portfolios in the Cayman Islands.

News that 1MDB had ploughed some US$2.3 billion into Bridge Global funds which is managed by little-known Hong Kong-based Bridge Partners was first reported by BT in May this year. The link between Bridge Partners and Avestra, however, appears unclear.

These funds itself arose from a convoluted tie-up between 1MDB and obscure firm PetroSaudi International (PSI) initially involving US$1.8 billion which eventually fell through and was converted into an Islamic debt facility.

The investments in the Cayman Islands regulated funds are generating US$267 million in dividend, said 1MDB chairman Lodin Wok Kamaruddin recently at the fund's first media briefing since it was set up five years ago where he vouched for the fund's transparency, although the event itself was open to very few, selected local media organisations. "To date, almost 60 per cent, or RM4 billion (S$1.55 billion), of the fund has been liquidated for settlement of1MDB's financial commitments. The balance will be liquidated before the end of the year," said Mr Lodin, according to a Malaysian news report.

1MDB, wholly owned by the Ministry of Finance and with Prime Minister Najib Razak as chairman of its advisory board, has been under stinging criticism for keeping its monies offshore, given that it is regarded as a sovereign wealth fund with most of its assets in Malaysia.

In recent weeks, there has been renewed and relentless attacks on 1MDB by opposition politicians in and out of Parliament.

On its part, 1MDB's opaque investment decisions and the fact that it is saddled with hefty debt - its borrowings have ratcheted up to RM41.9 billion for fiscal year 2014 from RM36.2 billion a year ago - have made it an easy target.

The fund's recently released delayed accounts for the fiscal year ended March 2014 provided additional fodder; escalating borrowing costs led the firm to swing into the red with losses of some RM665 million from a profit of RM778 million a year ago.

Last year's numbers were aided by huge revaluation gains of property assets of RM2.7 billion, in the absence of which the fund would have bled some RM1.9 billion.

Despite frequent remarks by top Malaysian officials and 1MDB executives that 1MDB is able to service its debt load, there still appears to be palpable and widespread concern over the fund's surging debt.

Singapore Press Holdings Limited

Document STBT000020141121eabm0000c

Posted 22nd August by Ganesh Sahathevan

Wednesday 16 September 2015

15-256MR ASIC seeks court orders to wind up Avestra Asset Management

ASIC has commenced proceedings in the Federal Court of Australia against Avestra Asset Management Ltd (Avestra), the holder of an Australian financial services licence and responsible entity or trustee of a number of managed investment schemes. Avestra's schemes are managed funds which invest in shares and other financial products.  ASIC understands the schemes comprise approximately $18.5 million under management.

ASIC alleges that Avestra has persistently contravened its duties in relation to a number of the schemes, including to:

• act in the best interests of scheme members
• exercise the required degree of care and diligence
• do all things necessary to ensure that the financial services provided under its licence are provided efficiently, honestly and fairly.

Among other things, ASIC alleges that Avestra borrowed money on an unsecured basis from the property of its schemes, and invested scheme property in entities and offshore funds connected to its directors without proper due diligence or regard for the interests of members.

ASIC is seeking interim orders to appoint provisional liquidators or receivers to take control of Avestra's assets and report on, among other things, any suspected contraventions of the law, any losses suffered by scheme members, and whether the schemes ought to continue in operation (under a new responsible entity) or whether they should also be wound up.

ASIC is seeking final orders that Avestra be wound up on a just and equitable basis.

The first hearing of the matter is listed for Thursday 17 September 2015.

Background

On 10 August 2015, ASIC issued an interim stop order in relation to a defective Product Disclosure Statement for one of Avestra's registered schemes, the Valensworth Fund. A final stop order was made by consent on 31 August 2015.

On 16 December 2014, Avestra was convicted and fined for breaching takeover laws, in relation to shares acquired by Avestra on behalf of various schemes. (refer: 14-339MR)

Editor's note:

At the first return date on 17 September 2015, the Federal Court ordered that ASIC's application for interim relief be set down for hearing on 27 October 2015 at 10:15am.