Disgraced stockbroker wound up
Halifax holding $211m in frozen funds
A FAILED stockbroking company run by well-known Gold Coaster Jeff Worboys will be wound up after a vote by creditors yesterday.
Halifax Investment Services holds $211 million in frozen investor funds belonging to more than 1200 people in three countries.
Administrators Morgan Kelly, Stewart McCallum and Phil Quinlan, of Ferrier Hodgson, will step up as liquidators of the company, which was placed in voluntary administration in November with a shortfall of up to $20 million in accounts funded by clients of Halifax.
Creditors of the company, which include its investors, heard Mr Worboys was cooperating with the investigation so far and had given an unspecified undertaking to the Australian Securities and Investments Commission.
They heard the same could not be said of Halifax’s auditors, Moore Stephens, which had showed some reluctance to release relevant documents to the administrators.
In the creditors report last week, the administrators said Halifax’s audited accounts lodged with ASIC “may be inaccurate” and could not be relied upon to determine the company’s solvency.
They flagged potential misstatement of revenue, and possible understatement of expenses leading to an overstatement of profit of at least $13.1 million over two years.
Creditors resolved to wind up Halifax and appoint a committee of inspection, made up of eight creditors, to oversee the liquidation.
They will have to wait for a court to decide whether their funds, effectively held in trust through various trading platforms, will be pooled so they can be dispersed.
The court will also have to approve the liquidators’ costs, which have been estimated above $1.44 million.
In the report to creditors, the liquidators said they believed Mr Worboys had used company funds to pay rent and bond on the waterfront Paradise Waters home he occupies with his family and that he still had possession of a luxury Bentley car, also at least partly paid for by the collapsed company.
Mr Worboys told the investigators the home was used as a “home office”.
ASIC suspended the company’s financial services licence on January 8, four days before he and wife Patricia were photographed enjoying the exclusive luxury of The Dome at the Gold Coast Magic Millions.
Mr Worboys is renting a waterfront home in exclusive Admiralty Dve at Paradise Waters, the same neighbourhood where his wife has sold two luxury homes in the past five years for a combined $8.6 million.
The liquidators’ investigation has so far found almost $4.8 million worth of transactions were potentially voidable, and thus may be recoverable for creditors, including $1.98 million in director loan account reductions days before the company went into administration; a $609,346 leave payment to Mr Worboys; a loan payment to another of his companies, AMH, for $124,301; rent payments of $49,631; a rental bond of $6087; and a $39,377 payout of a Bentley lease.
They found Halifax had likely failed because client funds were used to prop up the company’s operating losses “since at least January 2017”, and say the company may have been operating while insolvent since that time.
They found extensive “comingling” of accounts, meaning investor funds were improperly moved between trading platforms and accounting irregularities in documents lodged with ASIC.