The saga of the Tura Beach Tavern and the financial demise of many of its shareholders, will come under greater scrutiny next week. The News Weekly has learnt that ASIC, the Australian Securities & Investments Commission, will send investigators to the local area to talk with a number of people affected by the collapse of Tura Pty, the company which owned the Tura Beach Tavern.
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The tavern was recently sold to the Bega Valley Shire Council for $1.2 million at auction after Tura Pty went into liquidation but there was nothing for the mum and dad shareholders, some of them local families, who had invested in Tura Pty as part of their self-managed super funds, as the sale proceeds went to the mortgage holder, the NAB. Almost half a million dollars had been invested by local people in Tura Pty.
Many of the shareholders were clients of the 2020 Group, which provided financial advice on self managed super funds.
A major shareholder of Tura Pty Ltd was Nic Ellis who is also a director of the 2020 Group.
A number of clients of Mr Ellis’s company, 2020 Group, invested in Tura Pty through a loan agreement and linked share issue. Shares in Tura Pty were sold in blocks of 40 shares, each block worth $54,000. Investors were told that the funds would be used to complete the purchase of the hotel, including associated costs, renovations and the purchase of poker machine entitlements.
Clients were told that the three-year investment would be returned in 2012 with a 10 per cent return but when the date became due, there was no sign of the money and one investor triggered the company’s move into administration when she served two creditors statutory demands for payment of debt on Tura Pty.
Adam Farnsworth, of Dean Willcocks Shepard, was appointed voluntary administrator on November 14, 2012.
However at the end of the previous week, on Friday, November 9, 2012, a total of 348 shares from six shareholders changed hands.
The 348 shares were purchased by Lampten Pty. Mr Ellis is a director of Lampten Pty and his shareholding gave him significant voting rights. When a group of shareholders wanted to try trading the tavern back into a more stable financial situation, they were outvoted and liquidation was the only route left open.
The finances of Tura Pty took a severe downturn in the four months before the tavern ceased trading.
At the end of June 2011, the company had generated trading profits (before tax) of $47,421 on an income of $1.385 million. The following year, June 2011, the company did better, generating pre-tax profits of $91,829 on a slightly smaller income of $1.324 million.
However in the four months from July 2012 to the appointment of the administrator, November 14, the company accounts show a loss of $488,648 on an income of $260,822.
The administrator, Mr Farnsworth pointed out that the loss was in part related to the accrual of $309,079 in fees owned to 2020 Accountancy Solutions, one of Mr Ellis’s companies.
Accounting fees for the year ending June 30, 2009 are shown as $11,818 although the Tura Pty was only formed March 20, 2009 and the sale of the tavern is listed as being May 12 with completion in July 2009.
The following year accounting fees were listed as $26,016, in the financial year to June 30, 2011 accountancy fees were 336.93 and in the financial year to June 30, 2012, they were listed as a mere $90.71. But from July 1, 2012 to November 14, 2012, accountancy fees were listed in the company’s profit and loss statement as $309,079.
In his statement to creditors, Mr Farnsworth said that he had been advised the figures relate to administrative/accounting services provided to the company for prior periods.
There are also related party loan accounts. These show movements of money, sometimes substantial sums in the hundreds of thousands of dollars, between Tura Pty, Lampten Pty and Oxford Dean Pty. Mr Ellis is a director of all three companies and also had a separate related party loan account in his own name with Tura Pty, a matter that Mr Farnsworth in his report to creditors considered might have been an unreasonable director-related transaction.
In a completely unrelated matter, in April, ASIC banned Mr Ellis from providing financial advice for six years after an ASIC investigation found that Mr Ellis used $200,000 given to him by a client for investment, to pay off his credit card debts and also to purchase real estate.
Following the release of the ASIC statement on Mr Ellis, he issued a denial maintaining that the client chose to invest the money with him and that he returned it all to the client.
However, the ban has not stopped Mr Ellis’s company, the 2020 Group from offering financial services.
In a recent email to clients, the 2020 Group introduced its new Head of 2020 Planning and self managed super fund adviser, Thor McDowell.
The email, from Mr McDowell, said: “The owners of the 2020 Group and I have embraced the opportunity to make our advisory/planning division a greater success and add significant value to your experience.
“In recent times we have built significant relationships with other professional organisations in our field.
“To continue this growth and offer an improved customer experience the financial advisory part of the organisation will be rebranded Vivid Advisory as of June 10, 2013.”
Vivid Advisory’s offices are listed as 333, George Street, Sydney and 101, Beaumont Street, Hamilton, Newcastle, the same as the 2020 Group.
An ASIC spokesman said: “In relation to the effect of a financial services banning order under s920A of the Corporations Act 2001 (Cth), a person can still be a director of a company or be involved in the management of a company, however, the banned person is prohibited from providing any financial services.”
