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Federal Court appoints Deloitte to verify Keystone fund payments

By Reporter
3 minute read

The assets of the fund were frozen earlier this month by court order.

The Federal Court has appointed Deloitte executives Jason Tracy and Lucica Palaghia to have full control of the bank accounts of the Shield Master Fund.

With this, Keystone Asset Management, the responsible entity for Shield, is prevented from selling, transferring, or dealing with Shield’s assets, other than to make certain payments that must first be approved by Deloitte.

On 19 June, the corporate regulator obtained interim orders from the Federal Court to freeze the assets of the registered managed fund.


At the time, Justice O’Callaghan said Keystone is restrained from removing property from Australia; selling, charging, mortgaging, dealing with or disposing of property; incurring new liabilities; or withdrawing, transferring, disposing of, or dealing with money held in bank accounts or with a financial institution.

Also, Paul Chiodo, a former director of Keystone, was ordered to surrender his passport and be forbidden from leaving Australia while the Australian Securities and Investments Commission (ASIC) continues its investigation.

In a subsequent hearing this week, on 24 June 2024, the court ruled Deloitte’s Tracy and Palaghia will have to assess whether payments are in the best interests of Shield investors. They will have to prepare a report on the financial position of Shield by 23 July 2024.

According to ASIC, the action to independently verify payments is intended to protect investor funds while its investigation continues. Its concerns included that:

  • Keystone has failed to lodge Keystone’s and Shield’s audited FY2023 financial statements.
  • A large proportion of the funds held by Shield have been directed to a fund which made loans to various companies associated with former Keystone director Chiodo.

With the ruling, Chiodo also provided an undertaking to the court to give written notice to ASIC 14 days prior to any international travel and to take all reasonable steps to comply with any notices issued by ASIC in the event he is travelling overseas.

The previous travel restraint orders have been vacated.

The matter will be back before the court in August at a date yet to be fixed.

The Shield Master Fund was registered in May 2021. Since February 2024, it remains closed to new investments after ASIC made interim stop orders on four product disclosure statements for Shield.