Trio Capital (Trio) was in discussions to be acquired by another company for $10 million, the failed firm’s former investment manager Shawn Richard has said.
But talks had collapsed due to the media attention Trio had received and regulatory investigation which eventually led to the suspension of its Australian financial services licence (AFSL) by ASIC.
Richard made the admission in the New South Wales Supreme Court yesterday, the second day of liquidator PPB’s examination into Trio’s collapse.
Robert Newlinds SC, acting for PPB, had asked Richard why he had stopped being a director of Wright Global Asset Management for a period of about a month between November and December 2009.
Trio, formerly Astarra Capital, was owned by Astarra Funds Management, which was in turn owned by Wright Global Asset Management.
“Can you tell us what the circumstances were that forced you to cease being a director of that company for that short period of time in 2009?” Newlinds asked.
Speaking under court privilege, Richard said: “It was the intention of Wright Global Asset Management to sell Trio to another party and that party, in its negotiations, became the directors of Wright Global Asset Management.”
He said the potential buyer’s name was “Peter Chi” who represented a company called “KC Capital”.
The purchase price for Trio was $10 million and “the major reason” why deal talks collapsed was regulatory investigations and the media.
Newlinds also grilled Richard over statements that Trio made, when it was called Absolute Alpha, about having a management team with a combined 24-year history of managing absolute return strategies.
“Without getting into a fight with you about whether there was in fact a management team or not, the sentence is completely misleading isn’t it?” Newlinds asked.
Richard said: “Yes.”
“At the time, I may have convinced myself foolishly, but at the time I may have believed there was an argument that management team can mean all sorts of people and entities beyond the direct members of the management team and I can accept that I might have been totally wrong,” he said.
Trio Capital was put into liquidation in June.
