Financial Crisis Unfolds: Only a Small Portion of Lost Funds Recovered
Out of the staggering $446 million lost by up to 6,000 Australians due to the collapse of the superannuation fund First Guardian, only a meager $1.6 million has been recovered so far. This amount is a fraction of what was initially invested, leaving many investors in dire financial straits.
In March, the First Guardian Master Fund was placed into liquidation after the Australian Securities and Investments Commission (ASIC) obtained a Federal Court order to freeze its assets. Following this, FTI Consulting was appointed as the liquidator of Falcon Capital, the entity responsible for managing the First Guardian scheme.
On Tuesday, liquidators revealed that only $1.6 million had been recovered thus far. This recovery came primarily from the sale of assets such as a $548,000 Lamborghini Urus purchased by First Guardian director Simon Selimaj, 63, before the collapse. Additional funds were obtained from the recovery of $859,227 from Kanun Capital Pty Ltd as Trustee for the Kanun Capital Unit Trust, a lender to property developers, and $450,000 from the liquidation of craft brewer Fox Friday Brewing.
However, the liquidator’s fee of $2 million does not even cover the $1.6 million that has been recovered. FTI Consulting is now working on recovering the $243,391 owed to First Guardian’s lenders, which must be paid before embattled investors can receive any returns.
Despite these efforts, liquidators have warned investors that it is unlikely they will receive their money back in full. Partial returns are not expected until 2027.
Director’s Alleged Misconduct Sparks Further Investigation
In August, First Guardian boss David Anderson, 46, was seen on a peaceful stroll in a quiet coastal town on Phillip Island, while thousands of everyday investors faced financial ruin after his company collapsed. He was a director of the fund and its parent company, Falcon Capital Limited.
Mr. Anderson is accused by ASIC of siphoning $5.6 million into his personal ANZ account without any legitimate basis for payments in that amount being apparent to ASIC or disclosed to investors. His assets were frozen in February, and his passport was seized as liquidators and investigators combed through his financial records.
The Melbourne-born company director is also accused of moving $274 million overseas after learning of ASIC’s investigation into financial irregularities. FTI Consulting is examining entities and funds created by the directors and their acquaintances in the Cayman Islands.
A number of First Guardian investments will require legal action to recover funds. Other legal claims will mainly be against the directors, but it’s unknown if they will have the ability to repay money owed to investors.
Impact on Everyday Australians
Aussies like Canberra couple Simon and Annette Luck lost $340,000—almost all their retirement savings—due to bad advice from a financial planner. They had been planning a trip to the Netherlands and the UK to visit family. Now, they may need to sell their home and live in a caravan just to get by.
“Disheartened, dismayed and downright disappointed and let down,” Annette Luck told Daily Mail earlier this year.
ASIC took court action earlier this year to preserve any remaining assets of Falcon Capital and First Guardian so they can be recovered for investors. Around 6,000 people invested their money, including their superannuation retirement savings, into First Guardian. In many cases, this happened after people were contacted by lead generators and referred to financial advisers.
“These advisers often told investors to roll over their existing superannuation balances into a choice superannuation fund available on a platform or to set up a self-managed super fund (SMSF) to facilitate investment into First Guardian,” ASIC said.
ASIC has taken action in relation to Shield Master Fund, which collapsed in June 2024 and “involves some of the same persons and companies.”