Court freezes assets of Falcon Capital, First Guardian assets

ASIC has secured freezing orders against a Melbourne co-founder and two funds with ties to embattled property developer Paul Chiodo while it investigates millions in missing investor money.

ASIC has secured freezing orders against Falcon Capital and its First Guardian Master Fund which were based in Melbourne Picture: Ian Currie

The Federal Court has frozen the assets of Falcon Capital, the First Guardian Master Fund and First Guardian co-founder David Anderson, nine months after the fund suspended redemptions under the guise of a short-term “restructure”.

As revealed exclusively by The Australian earlier this month, First Guardian and its responsible entity Falcon Capital have ties to under-fire property developer Paul Chiodo, who is fighting allegations he spent millions of dollars of investor funds from the Shield Master Fund on personal expenses.

ASIC sought the Falcon and First Guardian freezing orders to help protect investor funds while an investigation is ongoing.

The orders restrain Falcon and Mr Anderson from removing their property (including the property of First Guardian) from Australia; selling that property; incurring new liabilities, and withdrawing, transferring, disposing of or dealing with money held in bank accounts in which Falcon or Mr Anderson have an interest.

Two of Falcon’s three directors, Simon Selimaj and Mr Anderson, are also the co-founders of First Guardian. Mr Selimaj, under the name Simon Sallka, is First Guardian’s chief investment officer, while Mr Anderson is listed as a portfolio manager.

While Falcon Capital is First Guardian’s responsible entity, it was also previously the trustee of the Chiodo Diversified Property Fund. Chiodo Corporation’s founder Paul Chiodo is at the centre of a court case concerning the Shield Master Fund, whose $480m in assets were frozen in June, leaving investors in limbo.

Paul Chiodo

Keystone Asset Management was the responsible entity for the Shield Master Fund.

Mr Chiodo stepped down as a Keystone director on May 27, the same day First Guardian investors were informed of the planned restructure.

An investigation by The Australian found First Guardian investors were directly exposed to Chiodo Corporation through the Chiodo Diversified Property Fund and that advisers at United Global Capital, an advice firm that had its licence cancelled last June and is now in liquidation, recommended First Guardian funds to clients before it was shut down.

UGC’s sole director, Joel James Hewish, was last year slapped with a 10-year ban from providing financial services, in part for creating a culture of noncompliance and incompetence at UGC, according to the corporate regulator.

Following enquiries from The Australian, Falcon Capital only told investors this month it had been waiting close to a year for the proceeds from exiting a property fund run by Mr Chiodo.

ASIC earlier this week secured freezing orders against two Melbourne men — Ferras Mehri of Venture Egg and Osama Saad of Aus Super Compre — in connection with its probe into Shield and other managed investment schemes.

ASIC deputy chair Sara Court told Senate Estimates on Thursday the regulator had several teams investigating schemes linked with Shield.

Separately, law firm Banton Group is considering taking a class action on behalf of Shield investors against investment bank Macquarie and ASX-listed financial services group Equity Trustees.

Banton Group partner Paul Smith told The Australian the firm is investigating a class action against Macquarie and Equity Trustees because they were the trustees of the superannuation funds and, in the case of Macquarie, the operator of the main platform through which investors accessed Shield.

First Guardian has been contacted for comment.

Originally published as Court freezes assets of Falcon Capital, First Guardian assets