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Wickham investors could begin class action by October

Date

Kristian Silva

Retirees who lost a total of about $27 million when investment fund Wickham Securities collapsed could begin a class action by October in a bid to recoup their money.

It comes after two burned investors had a huge win in the Federal Court on Thursday, after a judge ruled that Wickham’s trustee company Sandhurst Trustees should hand over a cache of financial documents.

Extraordinary revelations that Wickham forged financial documents to inflate its bank balance by $10.5 million were among the details revealed in the court judgement.

A group of about 100 investors, represented by Shine Lawyers, intend to commence a class action against Sandhurst after solicitors pored over documents in 11 lever-arch folders and a 561 megabyte electronic file.

They will allege the trustee breached the Corporations Act by not determining if Wickham could repay its customers.

It is believed Wickham’s investors, a majority of whom are from Queensland, have not received a cent since the fund went into liquidation early last year.

Administrators said that when Sandhurst approached Wickham over concerns about its cashflow position, Wickham supplied a “Bank Confirmation Statement” allegedly issued by the Bank of Queensland stating its application account balance was $10.78 million.

However, Bank of Queensland’s fund manager DDH Graham Limited concluded that the statement was fake after completing its own investigation.

“The account transaction listing received by the administrators from the Bank of Queensland shows that the actual bank balance account at 30 November 2012 was $264,892, thus leaving administrators to conclude that the earlier confirmation letter was fabricated,” Justice Andrew Greenwood said.

The administrators also found that Wickham did not maintain proper financial records, “thus preventing true and fair financial statements to be prepared and audited”.

It was also revealed that two of Wickham’s directors, Brad Sherwin and his brother-in-law Peter Siemons, told liquidators that they knew nothing about the fund’s business day-to-day activities.

Mr Sherwin and Mr Siemons claimed that Wickham’s CEO Garth Robertson handled all operations and matters relating to the fund loan book.

“Not only was there a major failing in the financial position of Wickham,” Justice Greenwood said, “There was, apparently, a major failing on the part of two directors to properly engage with the business activities, operations and undertaking of Wickham.”

The Australian Securities and Investments Commission handed Mr Sherwin a 31-month ban in September, banning him from operating in financial services.

The potential class action is likely to be heard in the Federal Court.

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