Keystone administrator rejects final bid for control of troubled Melbourne fund

Keystone Asset Management’s administrator has rejected a final bid for control of the troubled fund by building contractor Robert Filippini, who’s currently being probed by ASIC.

Paul Chiodo in front of the Venice Island Resort being eyed by ASIC. Sources supplied. Collage. Ratio 16:9.

A building contractor being investigated over claims he got $158 million worth of investor money from a Melbourne property developer without any formal contracts wants to control the troubled Melbourne fund where the money came from.

But administrators of Keystone Asset Management have rejected Robert Filippini’s offer to pay $75m for the company, where creditors could pursue claims of “at least $513m”, and say they will not recommend it at a second creditors meeting on Monday.

“It is our opinion that it is not in the best interests of creditors to approve the Filippini DOCA,” the administrators report read.

Former directors of Keystone Asset Management, including Melbourne property developer Paul Chiodo, are being scrutinised over the alleged misuse of money that was invested into Shield Master Fund — which was managed by Keystone.

Director Paul Chiodo from Melbourne-based property developer Chiodo Constructions

The Australian Securities and Investments Commission sought orders from the Federal Court to freeze money in the fund, amid extraordinary allegations Mr Chiodo spent $6.8m of investor money on personal expenses and hundreds of thousands on celebrity boxer appearances.

As well, Mr Filippini is facing an ASIC probe, amid concerns company’s linked with Mr Chiodo paid him about $160m for construction work on luxury developments when he didn’t have a building licence or written contracts.

About $115m in Mr Filippini’s accounts and those linked with his family has been frozen.

On Wednesday night, Keystone’s administrator Jason Tracy released his report on the proposal from Mr Filippini to take control of the company — and noted that it would effectively hand back control to former directors, including Mr Chiodo.

“Mr Filippini is the director of City Built, being the main “contractor” responsible for construction of the developments

undertaken by special purpose vehicles related to Chiodo Corporation and Mr Chiodo,” the report said.

“In total, there were ten (special purpose vehicle) loans for developments in Port Douglas, Victoria, K’Gari (Fraser Island) and Fiji.

“The book value of the … loans, inclusive of principal and interest, as recorded in the Company’s records as at 31 May 2024 was

$297,782,017.

“Based on the Administrators’ investigations to date, there are no construction contracts in place between City Built (or any other related entity) and the SPVs in relation to the SPV Developments, despite City Built’s status as the main contractor.”

The Keystone empire and Melbourne property developer Paul Chiodo

Mr Tracy said payment worth $158m have been linked with Mr Filippini from investor funds.

“These payments substantially exceed the value of works assessed as having been undertaken on the … developments,” the report said.

The Deloitte report said that amid investigations undertaken to date by ASIC, the administrators and receivers “have identified serious

misconduct and potential claims against numerous parties, including Mr Filippini and his related entities”.

“The Administrators consider that it is in the best interests of creditors for these claims to be properly investigated and prosecuted by a liquidator,” the report said.

Investor money in the Shield Master Fund is made up of superannuation funds, that have come from platforms with Macquarie and Equity Trustees.

As well, ASIC alleges companies linked with Mr Chiodo paid “lead generators” $65m to source new investors via self-managed super fund vehicles.

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