The embattled property fund has denied any foul play, after the ASX raised suspicions.
On Wednesday, the ASX sent a letter to US Residential Masters Residential Property Fund (URF), a listed fund operated by E&P Financial Group (formerly Evans Dixon).
The stock exchange had queried about a sudden fluctuation of the fund’s unit prices from 25 cents to 31 cents on Wednesday.
There had also been a “significant increase in the volume of URF’s securities traded” from Tuesday (20 April) to Wednesday (21 April), the letter from Neel Bhowmick, ASX adviser for listings compliance stated.
“Is URF aware of any information concerning it that has not been announced to the market which, if known by some in the market, could explain the recent trading in its securities?” the letter asked.
But URF denied the notion, with company secretary Hannah Chan writing back that the recent trading was the result of “one or more parties seeking to acquire units in URF on-market”.
“A recent approach from a stockbroker indicates that an investor is interested in acquiring units in URF. The responsible entity has no information regarding the identity of this party nor its reasons for seeking to acquire URF ordinary units,” Ms Chan wrote.
URF was established by E&P subsidiary Dixon Advisory in 2011, to give investors exposure to the US residential property market through investments in the New York metropolitan area.
ASIC launched civil proceedings against Dixon Advisory and Superannuation Services in September, over alleged conflicts, best interests duties contraventions and inappropriate advice around URF.
The case related to clients who had been advised to invest in URF and URF-related products between September 2015 and May 2019.
ASIC reported the fund paid substantial fees to several companies owned by Evans Dixon, including Dixon Advisory. It also alleged that the advice had resulted in at least 126 contraventions of the best interests duty under the Corporations Act.
360 Capital recently pulled out of its proposed acquisition of E&P Financial Group, signalling it would look for other growth opportunities.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].