The Administrative Appeal Tribunal (AAT) has been forced to reconsider whether to cancel property fund manager Opus Capital's Australian financial services licence (AFSL), following a Federal Court judgment.
The court last week overturned AAT's decision against ASIC's cancellation of Opus's AFSL.
It determined that the AAT was wrong in its opinion that Opus could use deferred tax assets to fulfil the net tangible assets (NTA) requirement imposed under its AFSL.
"The Federal Court's decision reinforces the integrity of the financial requirements for Australian financial service licensees that operate registered schemes," ASIC chairman Greg Medcraft said.
"'Deferred tax assets are not readily realisable or available should a licensee fail."
"ASIC imposes financial conditions on AFS licensees to help ensure that they have adequate financial resources to provide the financial services covered by their licence."
Opus is the responsible entity (RE) for 14 unlisted property funds. Its flagship Opus 21 product held about $230 million worth of commercial property in Queensland and Victoria as at December.
Earlier in the year, rival group Century Property Funds, now known as Centuria Property Funds, tried to replace Opus as the RE of Opus 21.
NTA requirements are imposed on AFSLs offering managed funds.
The AAT will now need to treat the deferred tax asset as excluded from Opus's NTA.
ASIC decided to cancel Opus's license in August 2010, after the company failed to rectify an ongoing breach of the NTA condition of its licence to the regulator's satisfaction.
Opus then successfully applied to the AAT to set aside ASIC's decision to cancel its licence. ASIC subsequently appealed that decision.
