'Destroyed records, falsified documents': ASIC turns up heat on ISG's $145m collapse

Liquidators of Brisbane’s failed $145 million ISG Group, who say they have uncovered the destruction of records and falsification of documentation, have been given $600,000 by the corporate regulator to investigate further.

The appointed liquidators, Olvera Advisors are also seeking to engage commercial litigation funders to recover company assets, including “scheme funds loaned/paid to related parties”.

In an update to investors and creditors, Tony Wright has further flagged public examinations of those responsible for the collapse, which has stung 1,600 investors.

Olvera said the Australian Securities and Investments Commission (ASIC) had provided funding for the “purpose of conducting further investigations” into ISG Group, including “identifying breaches of duties and misconduct” and “funds and asset tracing”.

ISG Group was swept into receivership in September 2024, having raised around $145 million from 1,600 investors since 2019.

It was founded in 2014 by its director Ben Godfrey and, according to its since-deleted website, invested in medium to large property projects and small-to-medium sized businesses.

“Opening up high performing private sector investment opportunities to all investors was the vision of Ben Godfrey and Maree Hawcroft when they founded the organisation 2014,” it states.

Olvera is to provide ASIC with its findings by 31 August.

Under the agreement, Olvera is responsible for “commencing proceedings to issue notices of production to parties of interest”, Mr Wright said.

Neither ASIC nor Olvera has stated the value of the funding agreement.

Searches of the Federal Government tender register by Australian Property Investor Magazine show it is $609,675.

The funding has come from ASIC’s “Assetless Administration Fund”, which funds “preliminary investigations and reports by liquidators into the failure of companies with few or no assets”.

“The AA Fund enables a liquidator to carry out a proper investigation and report, which then helps us decide whether to commence enforcement action,” ASIC states.

“It also funds a liquidator to take action to recover assets when fraudulent or illegal activity is suspected.”

Last year Olvera reported it had “identified instances of destruction of books and records” and “falsifying documentation”, about which it had notified ASIC.

Attempts by API Magazine to contact Mr Godfrey and Ms Hawcroft were unsuccessful.

The pair have drawn added ire from investors over their own high-rolling and flashy lifestyles.

More legal action to come

In the report to creditors, dated 21 January, Mr Wright said the ASIC funding would also be used to “identify liquidator commercial recovery claims” for the “benefit of creditors and investors”.

“Conducting public examinations…may be the subject of an additional funding request,” he said.

Olvera was currently approaching “commercial litigation funders” to commence proceedings “regarding two loss/damages claims”.

“Potential claims being investigated currently relate to scheme compliance breaches or breaches of general duties transfers/disposals or real property class assets, fee/commission arrangements…and scheme funds loaned/paid to related parties,” Mr Wright said.

“We anticipate further legal action may be commenced regarding potential claim matters on a speculative legal fee basis or commercial litigation funded bases”.

Any further action was “pending subject to the result of ongoing investigations,” Mr Wright said.

“Other potential claims may be identified through a future public examination process.”

Olvera had commenced action against three entities over loans they received from ISG Group entities.

In two of the cases, funds were returned after Olvera launched legal winding up applications against the entities.

In one disputed case, an entity that had borrowed $106,000 settled the debt for $30,000 after a winding up application was lodged, Mr Wright said.

In an undisputed case, a $100,000 loan was “in repayment discussions” following “commencement of a winding up proceeding”.

The third case involved a disputed ISG loan of around $250,000.

“One…loan for approximately $250,000 has an outstanding legal demand issued to the recipient entity and a caveat was lodged over a property purchased using loan funds,” Mr Wright said.

“The property is encumbered and we are seeking further information to determine whether a shortfall to the mortgagor is expected before taking further action”.

Where does it leave worried investors?

Olvera has been appointed liquidator over 29 ISG Group entities.

Mr Wright said approval would soon be sought from creditors to pool those entities for administration purposes, which would reduce costs.

“Investor funds were pooled by ISG and used sporadically across all of their investment classes,” he said.

“As such, all ISG Group creditors and investors may have a claimed entitlement to future recoveries of assets regardless of the class of asset”.

Mr Wright said Olvera would also require creditor approval before entering into any “litigation funding agreement”, and would seek approval at the same time for efficiency.

“Our legal advisors are in the process of finalising an application to Court regarding the Notices of Production under the ASIC funding agreement, which we expect will be issued to the recipients in February 2026,” he said.

ASIC’s heightened focus on ISG comes after the corporate regulator gave the failing property group its fundraising licence back despite it having frozen interest payments to investors and being insolvent for five months.

Investigations showed the Australian Securities and Investments Commission suspended the financial services licence of the failed ISG in July 2022, yet it reinstated the licence seven months later, in February 2023.