Dealer group Wright Global Investments (WGI) collapsed owing around $2 million to its employees and advisers, with more than $1 million linked to former Trio Capital chief executive Shawn Richard, according to minutes of the firm’s creditors’ meeting.
Peter Ngan, the director of WGI administrator Ngan & Co, said the firm’s liabilities, which may be understated, included $1.4 million to Richard, $180,000 in adviser commissions, $60,000 to the Australian Taxation Office, $23,000 in superannuation and $20,000 in employee entitlements.
Ngan said the company had cash at bank of around $120,000 with two debtors, Varker Nominees Pty Ltd and former WGI chief executive Mark Schroeder. Varker Nominees was seeking outstanding payments of $182,000, while Schroeder was claiming in the amount of $280,000, the minutes said.
A representative of Varker Nominees questioned Ngan on the status of a WGI trust account that was believed to have been set up by WGI to house adviser commissions.
“[Ngan] advised that there did not appear to be any trust accounts maintained by the company and that the commissions appeared to have been deposited into an operating account,” the minutes said.
“[Schroeder] claimed that the money was held in trust for the advisers regardless of whether the funds were placed in a mixed account.”
When questioned over the amount owed to advisers being greater than the funds in WGI’s bank accounts, Ngan said he was seeking legal advice on the matter.
“[Ngan] advised he is seeking legal advice in regard to commissions paid in the operating account prior to his appointment and any post-appointment commissions,” the minutes said.
According to the minutes, WGI had assets comprised of loans, plant and equipment valued at about $40,000 and an asset in failed advisory firm London Partners of $944,000. However, Ngan questioned the value of London Partners.
As well as questioning the value of the asset, he said there were concerns regarding the status of the client book of London Partners.
He said clients of the failed London Partners had been split up and there was an issue whether such a move was made with the company’s consent.
“[Ngan] noted that ASIC is investing the company and he had already attended a meeting with ASIC,” the minutes said.
“There appears to be disputable agreements where clients have been transferred.”
WGI purchased the Melbourne-based advisory firm’s client book in October 2009.
WGI was placed in voluntary administration in August.
