Administrators have commenced closing down subsidiaries within a group of companies involved in a $200 million alleged fraud against Westpac, with the Federal Court ordering the liquidation of the company at the centre of the scam.
Corporate restructuring firm Mackay Goodwin confirmed it had been appointed as administrators for the Forum Group of companies last week and had been undertaking investigations into the “viability for the continued trading of various business units” within the group, which employed 200 staff.
Westpac commenced proceedings in the Federal Court last month against Forum Group subsidiary Forum Finance, and obtained asset freezing orders earlier in July against two of its directors, Basile Papadimitriou and Vincenzo Tesoriero.
The bank recently disclosed to the market that it had detected a fraud worth approximately $200 million involving a portfolio of equipment leases with the bank’s customers arranged by Forum Finance, which were referred to Westpac’s institutional bank.
Mackay Goodwin said it had already closed operations of one business unit within the Forum Group, Iugis Food Waste, saying the business unit’s ongoing operation was “not viable”.
“The administrator is currently reviewing the viability of ongoing operations for two other business units of the Forum Group, those being Forum Group Managed IT Services and Autonomous Energy – a solar panel business,” the firm said.
“A decision is pending on whether the administrator can continue the operation of the aforementioned remaining two business units, which employ approximately 170 employees.”
Mackay Goodwin said there had been significant interest in the acquisition of both businesses, with over 100 inquiries received. The first meeting of creditors of the Forum Group would take place on 20 July, the firm said.
On Friday, the Federal Court ordered the winding up of Forum Finance as part of Westpac’s proceedings against the company, with Jason Preston and Jason Ireland of McGrathNicol to be appointed as liquidators, and extended asset freezing orders against the company’s two directors until further notice.
The case is expected back in court in early August.
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