Questions for administrator of USG FX (1st creditor meeting 10/16)

Questions for administrator of USG FX

1. Investor clients:

In your report page p25 and 26, you mentioned that you are still doing your investigation in order to classified if that investor clients are the company’s valid liabilities, may I ask what’s the criteria you are looking into ? As I represent a group of investor clients in Taiwan and we all directly deposited into CBA trust account, received the offering documentation quoted company’s AFSL number and all the past communications with USG Australia customer service, it should be no doubt the investor clients are the legitimate creditors.

2. ASIC court application

In the report page 14, I understand that ASIC has applied leave of court to commence legal proceedings against USG, and it includes refund of client net deposits,

Could you give us a bit more details?

• When will be the court hearing?
• Once the order is granted, would it be traced to the shareholder’s liabilities as we can see that the company assets are not enough repay the debts/ clients’ money
• Would this include investor clients?

3. Estimated return to creditors

In your report page 27, you mentioned:

In the high scenario, there is an assumed corresponding $120M asset recovery available to meet the investor claims liability and removed for the low scenario.

• Where is this $120M from? As in the previous information you mentioned that there is $137M claimed from 600 investor clients.
• When you mentioned ‘an assumed corresponding $120M asset recovery, is it because you have found the possibility, or it was just a blind assumption?
• In the case if you do not recognise the investors claims as USG’s liabilities, how are the investor clients seek for justice?

4. Administrator’s cost and

In the Annexure 4 (page 41), estimated statement of position

• You deducted the administration cost from the trust assets, is it the general practice?

If so, In the case of bankruptcy of the ASIC brokerages, the clients will suffer loss as I found administration cost is extremely high, that largely diluted the return to trust creditors.

5. Trust account:

This question is to the ASIC officers if there is any in the creditor meeting.

It seems that depositing in ASIC brokerages’ trust account has no protection at all, as it looks like brokers can move funds from trust account easily as we could see the case of Halifax, and USG. Isn’t it the regulator’s responsibilities to ensure the clients funds are segregated?

6. Professional Indemnity insurance

Has BRI Ferrier contacted the insurance company Tysers for PI insurance cover? As from our understanding of how USG operated it has triggered Fraud and dishonesty cover, could you update on this?

7. The ultimate shareholder Soe Hein Minn is no where to be seen but yet he remains to be a director and shareholder of USG UK, Vanuatu and Cyprus, it is suspicious is the funds were transferred to these entities to avoid the debts, is this under your investigation ? And are these company share certain responsibilities and liabilities?

8. Trust account

Could you share the investigation of the record of the CBA client trust account? As the most important thing for the creditor is to trace the funds. Is there abnormal transactions? Is CBA also being investigated as it is not fulfilled duty of care for client trust account?

9. Is the case classified financial crime? Is so, apart from complaints to AFCA (which is on hold due to the administration stage of USG), is there any other way you can suggest for returning the funds?