Court orders Brite Advisors be wound up amidst $106m gap in client funds held

The Australian arm of a global investment manager that has claimed to hold US$682 million ($1 billion) on its books has been ordered to be wound up by the Federal Court, following investigations that began in October after its failure to lodge financial statements or an auditors report for the 2022 financial year.

Investigations into Brite Advisors Pty Ltd found a discrepancy of US$69 million ($105.5 million) between what the company told its clients and their beneficiaries that it held on their behalf, and the amount identified by accountants as being held by Brite in its financial institutions’ accounts.

This gap was discovered by Linda Smith and Robert Kirman of McGrath Nicol, who were appointed to investigate the company in November, shortly after a court froze Brite's accounts on 27 October due to concerns over its unknown financial position at the time.

When that announcement was made, the value of Brite’s funds under management had not been reported by any entity within the Brite Group in an audited balance sheet since December 2019.

Providing advisory, pension administration and asset management services, Brite operates in multiple countries including the UK, US, Hong Kong and Australia with an investment platform to self-invested personal pension providers, qualifying recognised overseas pension schemes, and self-managed superannuation funds.

Smith and Kirman of McGrath Nicol were subsequently appointed as receivers and managers in December, and in a report that month they revealed that whilst the company reported holding US$682 million ($1 billion), they were only able to identify $612.9 million ($937.8 million).

In findings lodged in January, they determined that Brite was likely insolvent from at least the day its assets were frozen last year.

The Federal Court yesterday ordered the company be wound up on just and equitable grounds following an application by the Australian Securities and Investments Commission (ASIC), and appointed Smith and Kirman as liquidators, as well as receivers and managers over the property, assets and undertakings held by Brite on trust for others.

According to information from Brite's website, which is now not publicly available, Brite Advisors was founded by British entrepreneur and investor Mark Donnelly, who in the UK had previously built Metro Sports into a leading player name and number system for major football clubs.

The company was set up as an "all-in-one pension service for UK ex-pats abroad". On its website, the group reports to have Australian offices in Perth and Sydney, although both are listed with the same WA phone number.