ASIC receives court orders against Alliance Insurance Broking Services

The Federal Court has given the Australian Securities and Investments Commission (ASIC) urgent interim orders against Alliance Insurance Broking Services Pty Ltd (AIBS) and its director Renato De Maria (the defendants).

On June 30, 2021, the latest interim orders endorsed by the court and accepted by both parties require AIBS to:

• Appoint an independent sales agent to sell the business operated by AIBS by either August 30, 2021, or a different date set by the court;
• Appoint an investigative accountant to inquire into and report on AIBS’s affairs to the court and ASIC, and monitor transactions made by AIBS on all of its bank accounts;
• Instruct the investigative accountant to provide a report to the court that investigates AIBS’s assets and liabilities, reconciles client money and other business accounts to identify improper activity, identifies affected clients and insurers, and identifies suspected contraventions of the Corporations Act by AIBS, its director, its employees, and/or its agents; and
• Receive an injection of $5 million into its trust account through a personal loan from Lygon Finance Pty Ltd to Mr De Maria to meet its ongoing financial commitments.

ASIC first received urgent interim orders on May 14, 2021, to restrain the defendants from removing or permitting funds to be removed from five AIBS bank accounts and one personal account held by De Maria. The court also ordered the regulator to restrain the defendants from disposing of and/or diminishing the value of any property or assets held by, or in the names of, the defendants.

As an Australian financial services licence holder dealing in financial products, AIBS must hold client money in trust. However, ASIC alleged that De Maria caused substantial client money held by AIBS to be improperly paid into a bank account for his benefit.

Read more: ASIC issues permanent ban to former Reliance Group director

On May 26, 2021, ASIC filed further proceedings in the Federal Court seeking the appointment of provisional liquidators to AIBS. However, AIBS opposed the regulator’s application.

On June 30, 2021, ASIC and AIBS agreed to the orders endorsed by the court, which appointed registered liquidator John Lindholm of KPMG as the investigative accountant.

As a result of the orders, the proceedings filed by ASIC on May 26 have been adjourned. However, if AIBS fails to comply with any part of the court orders, the regulator can recommence its proceedings to seek the appointment of a provisional liquidator.

ASIC’s investigation into the defendants is ongoing and does not relate to or affect other financial advisers or corporate authorised representatives who may also provide insurance services offered by AIBS. It advised AIBS clients who have concerns about their policies to contact their insurance provider directly.