ASIC has started legal action in the Federal Court in Melbourne to wind up companies associated with two land banking schemes operated in Victoria and to disqualify Michael Grochowski and Ian Edward Stephens from managing corporations.
The two land banking schemes are known as:
Hermitage Bendigo (formerly Acacia Banks ) located at Midland Highway, Bagshot, Victoria and
Veneziane, located at Brooklyn Park Drive and Balmer Grange, Brookfield .
ASIC is seeking to appoint liquidators to four development companies which operated, or were associated with, the land banking schemes. The development companies are:
Brookfield Riverside Pty Ltd (ACN 159 111 047);
Bilkurra West Pty Ltd (ACN 169 059 143);
Bilkurra South Pty ltd (ACN 602 374 390); and
Gillies Road Pty Ltd (ACN 163 866 724).
ASIC is also seeking to appoint liquidators to Project Management (Aust) Pty Ltd (ACN 151 902 126) (PMA) and is seeking orders disqualifying Mr Stephens and Mr Grochowski from managing corporations for such period as the Court considers justified. ASIC alleges that PMA, Mr Stephens and Mr Grochowski were involved in the operation of the land banking schemes and that bank accounts relating to the development companies were operated by PMA under the control of Mr Grochowski.
ASIC is concerned that the development companies and PMA are insolvent and that it is just and equitable that the companies are wound up. ASIC’s investigation suggests that the development companies raised in excess of $15m from unsophisticated investors by the sale of options to purchase land or off the plan contracts of sale in land proposed to be developed by the development companies. However, the development companies have never owned the land.
ASIC’s investigation also suggests that attempts by the development companies to purchase the land have failed and that the developments are therefore unable to proceed or to be completed.
ASIC is also concerned that monies raised from investors have been transferred between a number of companies without any apparent concern for obligations that might be owed to those investors and that the majority of funds raised from investors have been dissipated.
