Background
ASIC was investigating Star Investment Group Australia Pty Ltd (SIGA), Gondal Holdings Pty Ltd and their sole director and shareholder, Ijaz Ahmad. SIGA had raised funds from at least 111 investors through instruments described as promissory or convertible notes, to fund a proposed Lake Narracan Resort development on land at Yallourn, Victoria owned by Gondal.
ASIC suspected failures to keep financial records, breaches of directors’ duties, and misleading conduct in promoting the notes. Its evidence indicated that substantial investor funds had been transferred overseas, including to Pakistan; SIGA had no registered security over the development land despite purported security arrangements; company records were incomplete or unproduced; and known accounts had low balances and were later closed. The land was on the market, while the investigation continued.
The Court’s Holding
Anderson J granted ASIC’s ex parte interim application under s 1323 of the Corporations Act. The Court restrained all defendants from dealing with or removing their property, required detailed asset disclosure, and allowed ASIC to notify financial institutions, asset registries and other holders of property. The restrictions did not prevent a bona fide sale of the Yallourn property, but required sale proceeds to be preserved as Gondal’s property, subject to payment of the registered mortgagees.
The Court also restrained Mr Ahmad from leaving Australia, required him to surrender travel documents if in Australia or on his return, and prohibited a passport application. Although he was then in Pakistan, the orders were framed to operate upon his return. The Court found reasonable grounds to suspect the pleaded contraventions and held that the interim measures were necessary or desirable to protect investors and preserve assets while ASIC investigated. It set an inter partes hearing for 23 September 2026 to consider continuation of the orders and any receivership application.
Key Takeaways
- Section 1323 permits protective interim orders before liability is established where investors may be aggrieved persons.
- Evidence of incomplete records, offshore transfers and an impending asset sale supported ex parte asset-preservation relief.
- The Court chose freezing and disclosure orders rather than immediately appointing receivers, while preserving ASIC’s ability to seek receivers later.
Why It Matters
The decision illustrates the Federal Court’s broad protective jurisdiction during an ASIC investigation into an alleged investment scheme. The Court treated asset tracing and disclosure as central to investor protection, alongside preventing further dissipation.
It also shows that a court may tailor preservation orders to permit an asset sale where the proceeds remain protected, rather than stopping a potentially value-realising transaction outright.