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ASIC Investigation of Alliance Insurance Broking Services Pty Ltd (AIBS)

By July 14, 2021No Comments

Key stakeholders in the AIBS business (its clients, staff, partners, insurers and other supporters) may have read reports through various channels or have seen a statement made by ASIC in relation to an investigation of AIBS undertaken by ASIC.  The following sets out what has occurred and AIBS position:

  • A few months ago, ASIC commenced an investigation into AIBS relating to how AIBS was treating monies paid to it by clients;
  • It is unclear to AIBS why that investigation was commenced as no client had, in fact, lost any money;
  • For many years, AIBS has operated two separate trust accounts;
  • As the holder of an AFSL, Alliance is entitled to invest client monies in certain permitted investments;
  • Acting on advice from its accountants and advisers, AIBS invested these monies in a company;
  • Through a related entity of the company in which the monies were invested and acting on advice that he could do so, director Renato De Maria borrowed an amount equal to the amount invested for purposes unrelated to AIBS;
  • ASIC has taken the view that the investment in the company was not a permissible investment and applied to the Federal Court seeking the appointment of a provisional liquidator;
  • The Court determined not to appoint a provisional liquidator at this time;
  • AIBS and Renato De Maria have agreed to sell the AIBS business, and have given various undertakings to the Court which are reflected in orders the Court recently made;
  • In accordance with the orders made, the following has occurred:
    a)  Pitcher Partners have been appointed to sell the business – an Information Memorandum has been prepared and will be circulated among potential purchasers after they sign a non-disclosure agreement
    b)  John Lindholm of KPMG has been appointed as investigative accountant
    c)  Renato De Maria has deposited $5m into the trust account; and
    d)  National Australia Bank, the group’s banker, has been informed.
  • ASIC has released a statement which AIBS considers to be misleading and inaccurate;
  • The fact is that it was AIBS who proposed an arrangement whereby the interests of all parties would be best protected by the sale of AIBS business.  ASIC rejected the proposal. The Court accepted AIBS position. Orders were then made to give effect to AIBS proposed arrangement;
  • Most importantly, the orders referred to in ASIC’s statement have ALL been complied with by AIBS; and
  • AIBS has cooperated fully with ASIC and is disappointed by the statement. It does not accurately reflect what has occurred.

Renato De Maria has an overarching desire to protect his staff, his clients, business partners and other key stakeholders and the best way to ensure that happens is to sell the business as a going concern. All clients can be assured they continue to have full coverage for their existing policies.

AIBS has a long history (over 20 years) of providing excellent service to its clients in assisting with their insurance requirements and although the events described above have lead to a process to sell the business, AIBS and its director Renato De Maria remain committed to ensuring that AIBS clients will continue to receive excellent service and assistance under new ownership.

In light of the ongoing ASIC investigation, it is not appropriate to comment further and AIBS will continue to operate on a “business as usual” basis throughout the sale process which is expected to conclude by the end of August 2021.

Please direct any questions you may have to our South Melbourne Office on 03 9647 0600.