The cash assets of Bongiorno Financial Advisors Australia Limited (BFAA) have been effectively non-existent for two years, despite the company facing a multi-million lawsuit over the Westpoint collapse.
In its last financial report filed with ASIC, the Melbourne-based family business revealed it had $5.3 million in liabilities, made a net loss of $553,400 and had cash on hand of just $12 at June 30, 2007.
During the last financial year the National Australia Bank had both a fixed and floating charge over the company for $3.25 million, which also had contingent liabilities of $731,218.
It had total equity of $26,012.
The corporate regulator began proceedings in the Federal Court on February 6 against BFAA and related entity Bongiorno Financial Advisors Pty Ltd.
ASIC is pursuing a potential damages claim of $8.5 million for 125 people who invested in Westpoint products on the recommendation of Bongiorno financial planners.
BFAA had no income for either 2005/06 or 2006/07 financial years and is dependent on the financial support of two related Bongiorno family trusts, Bongiorno Management Services and Bongiorno Enterprises.
The report noted that the companies would give ongoing financial support to the licensee “to ensure it is able to pay its debts as and when they fall due”.
The beneficiaries of the BFAA Trust said they would guarantee financial support to the company “until a sufficient level of profits has been achieved”, it said.
Last June, Australia’s largest advisory group Professional Investment Services bought a large part of the BFAA business, including 54 authorised representatives and 35 practices.
Company director Anthony Bongiorno told InvestorDaily that BFAA was a private company and he was under no obligation to discuss it.
