Groves denies trust company assets are really his
ABC Learning founder Eddy Groves has agreed to have his assets frozen, while denying most of his property is actually in a company in his new wife’s name.
His wife, Viryan Collins-Rubie, is the sole director of the discretionary trust company Perfection Too, while the Groves family, including children, are its beneficiaries.
In the Federal Court on Tuesday, John Halley, for the Australian Securities and Investments Commission (ASIC), contended the company is “the alter-ego” of Mr Groves.
And he said the corporate watchdog was concerned its assets were being dissipated, noting recent transfers of two Queensland properties, at Currumbin Valley and Palm Beach.
The ABC Learning group went into receivership in November 2008 with debts of more than $1.5 billion.
Justice Kevin Lindgren was due on Tuesday to hear an ASIC application to have Mr Groves’ assets frozen.
But Mr Halley said ASIC had reached agreements with Mr Groves, his former brother-in-law Frank Zullo and Ms Collins-Rubie for their assets to be frozen.
He said the issue of dispute related to Perfection Too.
After discussions throughout the day, the company agreed to give ASIC 24-hours notice if it intended to dispose of or move any of its assets.
The undertaking will continue until the judge conducts a hearing, on July 27 and 28, into ASIC’s claim that “a very significant portion” of Mr Groves’ assets “are held pursuant to the terms of the trust”.
“It promises to raise quite some interesting points,” said Justice Lindgren.
Mr Halley said Mr Groves contended the assets of the trust were not his.
The trust recently transferred to Mr Zullo the Currumbin Valley residence of Mr Groves, his wife and their children, Mr Halley said.
Further, he said a Palm Beach property, where Mr Groves and Ms Collins-Rubie used to reside, had recently been transferred to her.
Her lawyer, John Spencer, told the judge the beneficiaries of the trust were “the family of Mr Groves including several children, and that is all I really know”.
In fact, Mr Spencer said he did not even know the names of the children.
Mr Halley said, as matters currently stood, the only ASIC concern with Ms Collins-Rubie related to Perfection Too, including the transfer of the Palm Beach property to her.
AAP
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Brad July 1, 2009
When will the authorities wake up and stop this rot. If a company goes bust the promoter should not be allowed to skim the asset for cash.
For example the promoter should be allowed to draw a reasonable Salary and take profits when made. What seems to happen promoter thinks of a
scheme/idea they call it, sucks people including lenders then skims as much money as possible into Trust etc which is deemed to be his.
Should a company go bust the promoter should only be allowed a salary say $500K at the most or no more then the highest paid salary person in the company. In the event of a company going bust the promoter has to pay back to the receiver for say the last three years or from the time the company was deemed to be in trouble.
The penalty if they do not refund or have put it into the never never should be jail. Also those who are in receipt of the funds it should be treated as stolen funds. Get serious. We see this crap people who parade as business people who are just scam artist, treat them for what they are criminals
Under free enterprise the promoter should receive the Benefit but should also be responsible not the shareholder or lenders. Eddie was only pretending he was a business man. Australia needs more people to save, but they should be given more encouragement. Why save if the Eddie’s of this world are only going to skim it for themselves.
How could Mr Grove have accumulate those assets when his company was going bad.