The Australian Prudential Regulation Authority (APRA) is widening its investigations into failed fund manager Trio Capital, with the prudential regulator setting its sights on eight former Trio directors, a parliamentary committee heard last week.
APRA representatives revealed details of the regulator's continued investigations into Trio at last week's Parliamentary Joint Committee (PJC) on Corporations and Financial Services inquiry into the failings of Trio and related parties.
"We are continuing our investigations into former directors, going back to the establishment of the Trio board in 2004," APRA general manager of actuarial, market and insurance risk services Greg Brunner told the committee.
"We have received one further EU (enforceable undertaking) from John [Godfrey], who was a former director, so was not on the board at the time of the collapse.
"We are currently looking at a number of directors."
When asked by PJC members as to an exact number of directors on APRA's radar, Brunner said: "Eight."
Last month, APRA accepted its sixth EU from a former Trio director, this time Godfrey.
Godfrey was formerly the licensed trustee of five registered superannuation entities as well as the responsible entity of a managed investment scheme known as the Astarra Strategic Fund, a fund of hedge funds.
He was also a non-executive director of Trio from February 2005 until June 2007 and chairman of the board from June 2005 to February 2007.
APRA has accepted EUs from five other Trio directors: Natasha Beck, Rex Phillpott, David Andrews, Keith Finkelde and David O'Bryen.
On the same day as APRA provided details of its continuing investigation, an Australian Federal Police (AFP) representative dropped the bombshell that the AFP had ceased any "ongoing" investigations.
Commander Peter Sykora told the committee the AFP's role in regard to Trio had been "very minimal".
Asked to confirm that the AFP was not presently undertaking an ongoing investigation in relation to Trio, Sykora said "that is correct".
"The first thing we did with ASIC was assist them in a number of search warrants here in Australia. They had the investigative lead and they had the investigators to handle the investigation under the Corporations Act 2001," he said.
"So we were only called upon to act as a facilitator for those search warrants and the documents that were seized in regards to certain individuals were then passed to them [ASIC] for further investigation.
"ASIC then obviously came to us to facilitate international enquiries, which we did through our office, but then I also understand another agency was involved in Hong Kong. They [the Hong Kong agency] reached out to the AFP through the international office ... and we put them in touch with ASIC. That was as far as our involvement was concerned in that case."
Sykora's comments left members of the PJC silent for a few minutes, before PJC chair Deborah O'Neill asked for his view of the Trio case.
"I think given the loss that we've seen throughout, Trio is quite significant, but what we identified early on when ASIC approached us was that there was no Commonwealth fraud per se for the AFP," he said.
"It was a matter for ASIC to handle."
Last week's PJC public hearing into Trio was the committee's seventh and final.
The PJC will now use evidence collected during the hearings and submissions from industry stakeholders and investors to formalise its final report to the government. The report is due next month.
Trio Capital collapsed in late 2009, resulting in the loss of more than $100 million in investor funds.
