ASIC charges former Octaviar CFO with fraud

ASIC charges former Octaviar CFO with fraud

Just two years after he was banned from managing a corporation and ordered to pay $205 million to aggrieved shareholders in a failed fund, former Octaviar CFO David Anderson has been charged with 26 counts of fraud.

As a publicly listed company with interests in the financial services, travel, leisure and childcare sectors, Gold Coast-based Octaviar Ltd (formerly MFS Group) went belly up in 2008 with debts of $2.5 billion. 

After a protracted legal process, in 2017 the Supreme Court of Queensland ruled five former executives including Anderson had misappropriated almost $150 million and committed 217 contraventions of the Corporations Act. 

The funds were taken from a managed investment scheme known as the Premium Income Fund (PIF).

"The insouciant attitude of the defendants to this misuse of money intended to be used for PIF's investors beggars' belief," Justice Douglas said at the time. 

Anderson was disqualified from managing a corporation for 25 years, penalised $500,000 and ordered to pay $205 million to PIF and 70% of costs borne by the Australian Securities and Investments Commission (ASIC) in the proceedings.

The saga continues after the former executive recently appeared in the Southport Magistrates Court to face fresh charges from ASIC.

ASIC alleges Anderson dishonestly applied more than $4.6 million of funds from Octaviar subsidiary OIH3 for his own use between 18 June 2012 and 21 September 2015 while he was a director. 

"At the time of the alleged conduct, Mr Anderson was the sole director of OIH3," ASIC said.

"The charges were brought against Mr Anderson following an ASIC investigation into his conduct as the director of OIH3 and other companies in the Octaviar Group.

"Mr Anderson was released on bail on condition and the matter adjourned to 2 September 2019 before the Southport Magistrates court for further mention."

ASIC clarified the Commonwealth Director of Public Prosecutions is prosecuting the matter.

In June 2017, appeals were made by Anderson and three other former directors Craig White, Guy Hutchings and Michael King against the Queensland Supreme Court's dishonesty findings.

Anderson subsequently discontinued his appeal in September of that year and agreed to pay ASIC's costs of the appeal.

However, the other directors did not back out and in December last year King's appeal was partially allowed as the court found he had not contravened the Corporations Act.

In the 2017 decision, King was disqualified for 20 years, fined $300,000 and ordered to pay $177 million to PIF as well as 80 per cent of ASIC's costs.

The appeals court found his contraventions were limited to his being knowingly concerned in MFS Investment Management's (MFSIM) contravention by the misapplication of $130 million of PIF's money. 

Appeals brought by White and Huthings, as well as former MFSIM funds manager Marilyn Watts, were dismissed

Related stories: Appeal dismissed for former MFS execs involved in $147.5M misappropriation

Supreme Court orders Octaviar Group to wind up

Former MFS executives hit with disqualifications and massive fines for misappropriating funds

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