Former First Guardian CIO Simon Selimaj blames ex-CEO for mystery $39m developer loans
First Guardian's former chief investment officer has denied knowing about $39m in unsecured loans written to a property developer who played ‘the religious card’, claiming he only discovered the transactions when regulators told him.
First Guardian’s former chief investment officer has denied any knowledge of tens of millions of dollars in unsecured loans handed to a devout Melbourne property developer weeks before the fund was suspended.
Simon Selimaj on Monday told the Federal Court he only found out about the money when the corporate regulator looped him in late last year.
The First Guardian scheme collapsed into liquidation in April this year, two months after the Australian Securities and Investments Commission froze the fund’s assets.
But the fund had already suspended investor redemptions in May 2024, locking 6000 investors out of $450m in retirement savings that liquidators are now desperately working to claw back.
Much of the money is feared gone, with a report this month revealing liquidators Ross Blakeley and Paul Harlond of FTI Consulting have so far recovered just $1.6m.
Mr Selimaj said he knew nothing of the money loaned to property developer Abdullah Guerinat in May last year.
“I only found out on December 17th of last year when ASIC showed (the loans) to me,” he told the court when shown a list of funds advanced from Falcon Capital to various entities associated with Mr Guerinat, who also goes by the name Abidal. Falcon is the responsible entity behind the First Guardian scheme.
Included in the list was $11m handed to one of Mr Guerinat’s companies via an accounting firm, Tax E Australia, and a further $7.5m Falcon advanced to the developer through another company, Cornerstone Strategic Management.
Both Tax E and Cornerstone are companies owned by Ferras Merhi, the financial adviser at the centre of the First Guardian scandal who was allegedly paid millions of dollars to pump investor money into the fund.
Mr Selimaj, who arrived at court concealed by a face mask, said he only met Mr Merhi twice, indicating the financial adviser’s relationship was mainly with First Guardian’s former CEO, David Anderson.
In a short examination conducted by liquidators, Mr Selimaj sought to shift the blame on to Mr Anderson, saying his younger colleague was in charge of the unlisted side of the business, including dealings with Mr Guerinat.
“David would have had some sort of arrangement with Abidal to figure out (the deal) ... My specialty is listed. David understands the unlisted space. So David would have been in discussions with Abidal to sort out the terms (of any loan agreement).”
Mr Selimaj said he first met Mr Guerinat in 2020 and after doing some due diligence, his fund advanced $5m to the property developer for the purchase of a site in Tarneit, a western suburb of Melbourne.
“He used the religious card a lot, like he was religious and highly virtuous. He made like he wanted to do a project that would be successful and that he could donate some money to charity as well,” Mr Selimaj said.
He said that as far as he was aware, Falcon, as First Guardian’s responsible entity, handed the $5m to Mr Guerinat for the Tarneit development but got the money back within months. Mr Guerinat “lacked credibility”, Mr Selimaj said.
In fact, First Guardian money continued flowing to Mr Guerinat and his companies including Western Subdivisions, Rajomon, and 1190 Doherty Road Pty Ltd, the special-purpose vehicle set up to purchase the Tarneit property.
Mr Selimaj acknowledged that he was, for a time, listed as a director of one of Mr Guerinat’s companies, Rajomon, but said he could not recall signing a consent form appointing him.
Falcon was also the trustee for the Rajomon Opportunities Fund, set up in May 2020, whose beneficiaries were listed as “unitholders of the Chiodo Diversified Property Fund”.
In 2023 and 2024, tens of millions of dollars of First Guardian investor money was handed over to the small-time Melbourne property developer without any loan agreements or security in place, the Federal Court heard. The scheme advanced $39m in net terms, the court heard.
Falcon gave $23m to Mr Guerinat and his company, Western Subdivisions, in 2024 to fund the purchase of a piece of land just outside of Geelong, alongside a commitment to loan a further $10.5m over a number of months for a total $33.5m.
This was on top of $21m Mr Guerinat had received the year prior from Falcon via Mr Merhi’s accounting firm Tax E. That money also came from the First Guardian fund, the court heard.
In both instances, loan agreements were executed after the money had been handed over, with no security or collateral put up to protect the investment. The money is yet to be repaid, with lawyers for the liquidators also questioning Mr Guerinat in court on Monday.
The purchase of the site near Geelong went ahead this year.
But in a devastating assessment, the liquidators’ lawyers suggested moves by Mr Guerinat to establish a new company and identify that entity as the nominee in the sale contract meant he was buying the property free from any liability.
“Isn’t the consequence of that nomination, Mr Guerinat, that this new company (Blackrock Property Holdings), of which you are the sole director and sole shareholder, acquires a property for effectively no money?” counsel for the liquidators put to Mr Guerinat.
“The purchase has been financed by Rajomon Fryansford (also known as Western Subdivisions). It has the liability to Falcon, and Blackrock takes the property free from any liability. That’s the consequence of the nomination, isn’t it?”
Mr Guerinat replied that he was not sure what the legal consequences were but later in the day, under questioning from his own lawyer, said Blackrock had accepted the liability of the $33.5m loan.
The court heard that the 2025 financial report for his Western Subdivisions showed a series of related-party loans – loans to Mr Rajomon’s other companies – totalling $33m, including a $25m loan to Blackrock.
Examinations of Mr Selimaj, Mr Guerinat, Mr Anderson and others will continue later this month.
