In a statement, the corporate regulator said it had “acted to address concerns” about the boutique fund’s operations and its ASX-listed managed investment schemes such as the Aurora Property Buy-Write Income Trust (AUP).
“ASIC has imposed conditions on Aurora’s financial services licence. This follows ASIC undertaking inquiries into the misappropriation of $1 million of investor funds from the AUP in February 2017 by Aurora’s former chief financial officer, Ms Betty Poon,” the statement said.
In February 2017, Ms Poon misdirected money from a bank account held under Aurora’s name into her own account.
According to ASIC, the boutique fund did not detect the behaviour for around nine months, and on 27 November 2017 Aurora gave ASIC a “verbal” notification of the fraud and lodged a breach report on 29 November.
Aurora then terminated Ms Poon and referred her to the Victoria Police.
Following ASIC intervention, Aurora was ordered to repay $1 million to AUP as well as compensate it for any lost earnings before recovery.
“ASIC remains concerned that the misappropriation, and Aurora’s failure to detect it for several months, occurred because of deficiencies in Aurora’s corporate governance and risk management frameworks.
“Ms Poon held several senior and conflicting roles that facilitated the occurrence and cover-up of her fraud,” the statement said.
ASIC has now imposed licence conditions requiring the boutique fund manager to engage an independent expert, approved by ASIC, that will “assess and report on the adequacy of its resources, corporate governance and risk management practices”.
According to the statement, Aurora has agreed to the conditions and will have to engage an expert by 30 June 2018.
ASIC commissioner Peter Kell commented: “’The additional conditions imposed on Aurora’s licence reflect ASIC’s priority of protecting investor money and ensuring that responsible entities have appropriate corporate governance and risk management standards in place to keep fund assets separate and secure.”
