Australian Securities
and Investments Commission
Office address (inc courier deliveries):
Level 7, 120 Col ins Street,
Melbourne VIC 3000
Mail address for Melbourne office:
GPO Box 9827,
Brisbane QLD 4001
Tel: +61 1300 935 075
Fax: +61 1300 729 000
www.asic.gov.au
Phillip Sweeney
By email: foi+request-10672-
xxxxxxxx@xxxxxxxxxxx.xxx.xx
Our Reference:
FOI 191-2023
13 September 2023
Dear Mr Sweeney
Freedom of Information Request No. 191-2023
Acknowledgement of Request
I refer to your request dated 8 September 2023 under the
Freedom of Information Act
1982 (
FOI Act) in which you seek access to documents in the possession of the
Australian Securities and Investments Commission (
ASIC).
Your request seeks access to the fol owing:
“Dear Australian Securities and Investments Commission,
In 2014 the SENATE ECONOMICS REFERENCES COMMITTEE undertook an “Inquiry into
the performance of ASIC”.
Included in the “Questions on notice for ASIC” was a question from the Committee
related to a Defined Benefit Regulated Superannuation Fund that was constituted and
established by a Trust Deed made on 23 December 1913 and which was closed to
new members on 30 November 1997. This fund is legally identified by the original Trust
Deed and not by the various “names of convenience” used over the last century
which have inclued “The Provident Fund”.
This superannuation fund was established as a “private trust” but became a Regulated
Superannuation Fund in 1994 and was registered by APRA in 2006.
The Senate Committee sought a response from ASIC related to:
“Submissions 277, 109, 133 and 146 ) – The Provident Fund The committee has received
several submissions regarding the Provident Fund, an employee benefit fund
(superannuation fund) that was established in 1913. The submissions claim that
qualifying male officers are entitled to a pension for life and their widows are then
entitled to a survivorship pension. The submissions al ege that the original trust deed
was fraudulently altered and the conditions of the original trust deed are not being
complied with (i.e. the pensions are not being paid).”
If pensions are not being paid then is is an ongoing offence, since former trustees
cannot pay benefits fal due after the trustee has retired from the office of trustee. The
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innumbent trustee must pay pensions from the date that the trustee accepted the
office of trustee.
In ASIC’s written testimony to the Committee the fol owing was stated:
“ASIC notes that a large number of the complaints and FOI requests received in
relation to the Fund have not principally concerned allegations of fraudulent
behaviour, but rather al egations that the trustee of the Fund has failed to comply with
its disclosure obligations under section 1017C of the Act. Section 1017C of the Act
requires trustees to provide a concerned person – typical y a member of the fund
within the preceding 12 months – with certain information, including information they
reasonably require for the purposes of understanding any benefit entitlements that
they may have under the relevant superannuation product.”
Now ASIC only makes reference to the provisions of Subsection 1017C(2) of the
Corporations Act 2001 which is more relevant to members of Defined Contribution
funds.
ASIC fails mention the provisions of Subsection 1017C(5) of the Corporations Act and
related Regulation 7.9.45 and the penality of two years imprisonment for the
contravention of this subsection in Schedule 3 of the Corporations Act 2001 which is
relevant to members and beneficiaries (eg widows) of Defined Benefit funds.
Trustees must provide a copy of the original Trust Deed that constituted and
established the fund as wel as copies of any amending Deeds fol owing a written
request by a person with a “beneficial interest” in the fund.
Why did ASIC seek to conceal this important information from the Senate Committee?
In a letter dated 11 February 2014 to former Senator John Wil iams, Gerard Fitzpatrick,
Senior Executive Leader, Investment Managers and Superannuation also attempted to
mislead the Senator as to the provisions of Ssection 1017C of the Corporations Act
2001.
Mr Fitzpatrick was caught out and had to correct his misleading letter of 11 February
2014 in a letter dated 3 March 2014 and advise the Senator of the provisions of
Subsection 1017C(5).
In this second letter Mr Fitzbatrick states:
“We understand that the Previous Trustee also took the view that access to copies of
the earlier trust deeds was not available under subsection 1017C(2). For the reasoning
set out above, access to copies of earlier trust deeds is unlikely to be available under
subsection 1017C(5) and associated regulations.”
There are no such thing as “earlier trust deeds”
There is an original Trust Deed that constituted and established the trust (fund) and if an
amending power was reserved in the original Trust Deed then the provisions of the
original Trust Deed may be amended to improve benefit entitlements, but not
decrease or eliminate benefits.
The original Trust Deed and al VALID amending Deeds must be read as “one legal
document” and a trustee should seek judicial advice if any doubt arises in reading
these deeds a “one legal document”.
If a trustee has been engaged in a “Deed Substitution Fraud” and paying much lower
benefits than prescribed in the original Trust Deed and VALID amending Deeds, with a
later dated fraudulent document represent as the “Trust Deed”, then the trustee would
not want fund members and beneficiaries having access to the genuine deeds that
would confirm a major fraud.
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Mr Fitzatrick in his letter dated 3 March 2014 to Senator John Williams essentially
confirmed that members and beneficiaries of this particular Defined Benefit fund had
been the victims of a “Deed Substitution Fraud”, where widows of former members get
no benefits and members only get a benefit worth around 20% of their lawful
entitlment based on average life expectancy.
If ASIC had enforced subsection 1017C(5) of the Corporations Act 2001 with a direction
to PFS Nominees Pty Ltd (purported trustee from 20 January 2014 to 30 June 2016) and
to NULIS Nominees (Aust) Ltd (purported trustee from 1 July 2016 to the present) to
comply with subsection 1017C(5), then the “Deed Substitution Fraud” would have
been quickly exposed.
Royal Commissioner Hayne stated the following in his Final Report in section 3.1:
“ASIC is charged with enforcing financial services laws on behalf of the community.
One of ASIC’s objectives is to ‘Take whatever action it can take, and is necessary, in
order to enforce and give effect to the laws of the Commonwealth’. The community is
entitled to expect and does expect, that financial services entities will comply with
those laws.”
In his letter dated 3 March 2014, Mr Fitzpatrick made no mention to Senator Wil iams
that the maximum penality for a contravention of Subsection 1017C(5) of the
Corporations Act 2001 is two years imprisonment
The document I seek is a copy of any correspondence from Gerard Fitzpatrick (or
other ASIC Officer) to Senator Wil ams further clarifing the 3 March 2014 letter which
itself had clarified the 11 Febuary 2014 letter.
The search period is from 3 March 2014 to the present.
Yours faithful y,
P.C. Sweeney”
As your request was received on 8 September 2023 and the 30-day statutory period
for processing the request commenced on the day after the date of receipt, you
should therefore expect a decision to be made by 9 October 2023.
The 30-day processing period may be extended should ASIC find it is necessary to
consult third parties, where a charge is to be imposed on the processing of the
request or for other reasons. You will be advised if there are changes to the 30-day
processing period.
Please note that any documents released to you under the FOI Act may later be
published online on the ASIC disclosure log in accordance with our obligation to do
so under the Act. This requirement to publish released documents is subject to certain
exceptions for example, personal or business information will not be published where
it would be unreasonable.
If you have any questions or wish to discuss, please contact me at
xxxxxxx.xxxx@xxxx.xxx.xx.
Yours sincerely,
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Krystal Fung
(Authorised decision maker under section 23(1) of the FOI Act)
For the Australian Investments & Securities Commission
