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April 29, 2014updated 04 Apr 2017 2:19pm

ASIC cancels Banksia’s AFS licence

ASIC has cancelled Banksia Mortgages' Australian financial services (AFS) licence.

By Verdict Staff

ASIC has cancelled Banksia Mortgages’ Australian financial services (AFS) licence.

Banksia Mortgages is one of four subsidiaries of the Victoria-based Banksia Financial Group, which collapsed in 2012. The others include the debenture issuer Banksia Securities Limited, Cherry Fund Limited and BFG Management Pty Limited.

In August 2013, the Supreme Court of Victoria made orders authorising Banksia Mortgages to wind up the Banksia Mortgage Fund on the basis that it was just and equitable to do so. In December 2013, a sale of Banksia Mortgage Fund’s portfolio of loans saw US$85 million distributed to 1,200 investors.

In April 2014, Banksia Mortgages applied to ASIC to cancel its AFS licence to minimise ongoing costs to investors and to allow it to transfer money to Banksia Securities Limited which it had been maintaining for the purposes of liquidity requirements under its AFS license.

Most investors in Banksia Mortgage Fund have received 100% return of their money plus interest. Around 108 investors are yet to be paid all of their money back.

Receiver McGrathNicol has so far paid out 80 cents in the dollar to Banksia Securities Limited investors.

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