High-rolling ISG director loses luxury cars but investors still left at the curb

The executive director of failed Brisbane property investment giant ISG Group has filed for bankruptcy and the group’s luxury vehicles are being repossessed, according to liquidators.

Olvera Advisors — appointed liquidators to 27 ISG entities —have said the group’s directors, including Executive Director Ben Godfrey, are refusing to hand over key documents, amplifying calls for the corporate regulator to act.

A report to creditors for 15 of the companies, released by Olvera on 12 September, shows those companies have financial “deficiencies” of well over $210 million.

The liquidators report that high-interest business lender Bizcap “have a number of security interests across the companies” but had “not yet received any response from Bizcap” as to the nature of those debts.

Three Mercedes Benz motor vehicles, including a $195,500 GLC63S AMG Coupe, and a $90,400 GLC43 AMG, were in the “process of being repossessed” the creditors’ report states.

“The Former Director(s) has failed to provide us with a completed Report on Company Activities and Property [ROCAP] for the Companies despite numerous requests,” writes liquidator Tony Wright.

“We have sought assistance from ASIC in this regard.”

Godfrey had filed a “debtor’s bankruptcy petition” on 3 March, the report states.

As previously revealed by Australian Property Investor Magazine, ISG had allegedly been trading while insolvent for over a year, and Olvera have allegedly discovered the “destruction of books and records” and the “falsification of documentation”.

As previously reported, corporate regulator the Australian Securities and Investments Commission (ASIC) suspended ISG’s financial services licence in July 2022, among the reasons being its failure to file its annual reports.

ASIC reinstated ISG’s licence in February 2023, despite the group having been insolvent from around September 2022, according to liquidators.

ISG collapsed 18 months later, owing $145 million to more than 1,600 investors.

“Our investigation into the Group is ongoing, and at this time remains sensitive in nature,” Mr Wright reported.

“We are progressing a funding request with the Australian Securities and Investments Commission for the purpose of further investigations to be undertaken regarding the ISG Group.”

ASIC spokeswoman Angela Friend told API Magazine ASIC had been investigating ISG since July 2023.

“Since July 2023, ASIC has been undertaking an investigation into suspected contraventions of provisions of the Corporations Act in relation to the affairs of ISG,” Ms Friend said. 

“The investigation is ongoing.”

ASIC declined to comment whether it had provided Olvera with funding under ASIC’s “Assetless Administration Fund”, as applications for funding by liquidators were “made in confidence”.

“It is not uncommon for applications to be made for funding in relation to companies that ASIC is concurrently investigating,” Ms Friend said.

“All applications are assessed by ASIC against the eligibility criteria and assessment criteria, including an overall consideration of value with relevant money.

“We are unable to comment further while our investigation is ongoing.”

Searches show Mr Wright was in March awarded an $11,550 “director banning grant” from the Assetless Administration Fund in March.

The Federal Government’s grant register states the payment comprised “funding to a liquidator of an assetless company to investigate” and report to ASIC, “primarily to assist ASIC to determine whether to disqualify a person from managing corporations”.

The liquidators of the 27 ISG entities, all from Olvera, are Mr Wright, Katherine Barnet and Neil Cussen.

30 ISG entities under scrutiny

Searches show Ms Barnet was awarded an $11,550 “director banning grant” from the Assetless Administration Fund, which ran from 1 April to 30 April.

Mr Wright and Olvera did not respond to requests for comment.

Olvera Advisors have been appointed liquidators to ISG Fund Management and its two schemes, the ISG Real Estate Equity Fund and the ISG Private Access Fund, which are both described as managed investment schemes.

The group has been appointed to 27 ISG entities and is seeking to be appointed to three more, the creditors’ report states.

Olvera said it had discovered the destruction of records.

“In…our Receivers’ Report, we outlined the limitations of books and records received,” Olvera wrote.

“Since the Receivers’ Report we identified instances of destruction of books and records and falsifying documentation.

“We have notified ASIC of these incidents,” it stated.

The latest creditors’ report states ISG company HMS Partners Nominees had leased the three Mercedes vehicles, through Macquarie and Pepper.

The cost of the vehicles was $363,443, of which $254,565 remained outstanding.

The current value of the vehicles was less than the $254,565 in outstanding payments, the report states.

“Our investigations are ongoing and at this time are focused on ongoing winding up applications of further Scheme related entities, and obtaining funding from ASIC to perform examinations,” wrote Mr Wright.

“If there are identified breaches of director duties that we intend to pursue we will provide that detail in further reports.”