Coffee and a Case Note
Capital Guard AU Pty Limited [2026] NSWSC 897
“I’m the regulator. You’re getting wound up.” ___ ASIC sought an order winding up a Co pursuant to s 461(1)(k): [1] Neither the Co nor its Dir appeared in the litigation: [2] (A Co failing to appear at its own winding up application did not inspire confidence in the Co’s management: [20]) The Court considered some general principles relating to ASIC s 461(1)(k) apps including: (i) the importance of a lack of confidence in a Co’s management; (ii) the requirement that a risk to the public interest (including where investor funds might be put at risk) be demonstrated; and (iii) generally, the Court’s reluctance to wind up a solvent Co: [16] – [18] At relevant times, the Co held an AFS and provided investment services, apparently specialising in bonds: [21] – [27] The Co purported to sell to retail clients (or acquire on their behalf) bonds which did not exist, or which the Co was unable to sell or hold on behalf of its clients: [28] i.e. It was a scam. The Court heard from various clients who has been deceived. One client transferred $100K to the Co to secure bonds issued by a reputable institution, the problem being: that institution had never issued bonds of that kind: [30] – [32] Another transferred $250K to the Co to secure bonds which the original issuer had not approved for issue to retail clients: [33] – [36] Another transferred $120K to the Co to secure bonds which, evidence showed, were not acquired by the Co: [37] – [39] A further client transferred $160K to acquire bonds which it appeared did not exist: [40], [41] The Co provided false information to its auditor: [42] – [45] ASIC reviewed the Co’s accounts forensically and found $17m had been transferred to the Co. $9m of that had been applied to crypto assets. Only $100K had been invested in bonds: [46] – [49] The Co had no other assets of note: [50] Evidence showed the Co’s sole director had no involvement in its affairs or knowledge of its financial position: [51] – [53] In July 2026, the Co indicated in writing to a client it was “winding down” operated with assets to be “assessed for liquidation”. This led ASIC to correspond with the Co’s lawyers, who were unable to obtain instructions: [58] – [60] There were strong grounds for a lack of confidence in the Co’s management: (i) the Co misled clients about investing in bonds that did not exist; (ii) the Co sent false accounts to its auditor; (iii) having taken ~$17m from clients for bonds, the Co has only purchased ~$100K of bonds, and otherwise invested in crypto and no other assets of value; and (iv) the Co’s Dir has exercised no oversight over the Co: [61] The Court accepted the Co’s existence presented a risk to the public interest: [62], [63] There was some doubt as to the Co’s solvency: [64] The Court found it was just and equitable that the Co be wound up pursuant to s461(1)(k): [67] ___ Please follow James d'Apice, Gravamen, and Coffee and a Case Note on your favourite platforms! www.gravamen.com.au
