Nearly $450 million is feared lost from an Australian superannuation fund after its directors allegedly engaged in extravagant spending, including the purchase of a luxury Lamborghini, before the fund’s collapse. A creditor’s report has now shed light on the fund’s financial mismanagement, raising concerns that savers may never recover their investments, potentially jeopardizing their retirement plans.
The First Guardian Master Fund was placed into liquidation in March after the Australian Securities and Investments Commission (ASIC) secured a Federal Court order to freeze its assets. FTI Consulting managing partners Ross Blakeley and Paul Harlond, appointed as liquidators in April, have expressed doubts about the possibility of creditors recovering their money.
‘In the absence of considerable recoveries from alternative potential claims in the liquidation, insufficient funds will exist to meet all claims of creditors,’ they stated.
Financial Mismanagement Unveiled
The liquidators have revealed that approximately $446 million could be owed to retirement savers, whose superannuation was invested in questionable ventures. The report indicates that significant amounts were transferred offshore to foreign jurisdictions, with investments in technology ventures that have yet to generate income.
Allegations have emerged against David Anderson, a director of the super fund and parent company Falcon Capital Limited, accusing him of diverting millions into his personal ANZ bank account. The report highlights evidence of transactions involving Anderson and entities linked to him, necessitating further investigation.
Extravagant Purchases and Legal Actions
Before the fund’s collapse, Anderson reportedly purchased a $9 million mansion along the Yarra River in Melbourne’s upscale suburb of Hawthorn. Fellow director Simon Selimaj is associated with a $548,000 Lamborghini Urus, which was registered in his name. The Federal Court has prohibited both Anderson and Selimaj from leaving Australia until February 2026.
The Lamborghini, seized by liquidators and currently valued between $350,000 and $400,000, was purchased by the company in January 2023. The directors failed to disclose this luxury vehicle in the report on company activities and property.
Marketing Fees and Potential Conflicts
First Guardian reportedly paid over $40 million in marketing fees to Cornerstone Strategic Management, linked to Venture Egg Financial Services, and the now-liquidated Atlas Marketing and Indigo Group, between August 2021 and February 2024. The creditors’ report suggests these funds were sourced from the super fund, raising concerns about potential conflicts of interest and breaches of duty.
‘There are concerns that the payment of fees purportedly for marketing services may have given rise to a conflict of interest, breach of duties, and has depleted investor funds,’ the report noted.
Investors were drawn to First Guardian through Venture Egg Financial Services, directed by former VFL ruckman Ferras Merhi. Following an ASIC application, the Federal Court froze Merhi’s assets in February.
Asset Valuation and Legal Defense
The report also questions the valuation of First Guardian’s assets, suggesting they may have been overstated in the accounts. The liquidators believe the recoverable value of investments is likely far less than their reported book value.
‘The overall recoverable value of the investments is likely to be considerably less than their combined book value and the view expressed by the directors,’ the report stated.
David Anderson’s defense lawyer, Dan Mackay, has emphasized that no legal findings have been made against his client. Mackay asserts that Anderson intends to fully exercise his rights in response to any allegations at the appropriate time and forum.
The collapse of the First Guardian Master Fund highlights the vulnerabilities within financial oversight and the potential risks faced by investors. As the investigation continues, affected savers remain in limbo, awaiting clarity on the recovery of their investments.
