‘Million dollar handshake’ for Chambers MD
The director of Chambers Investment Planners may walk away from the liquidation process with access to almost $1 million in related party loans, while former clients are unable to afford litigation proceedings against the firm.
According to the most recent report to creditors from appointed administrators, Chambers managing director George Takla “made loans to related parties” totalling $965,000.
The loans were made to Bernice and Medhat Takla – understood to be Mr Takla’s daughter and son respectively – between “FY11 and FY12”, once claims had already been filed against the company with the Financial Ombudsman’s Service.
The administrators are currently examining liquidation options considered to be in the best interests of creditors, with a wind-up proposal – recommended by the administrators – and a Deed of Company Arrangement (DOCA) proposal – preferred by the Takla family – the most feasible options on the table.
The report explains that “if the company executes the proposed DOCA, the deed administrator will release the related parties from their loans payable to the company” in exchange for a guaranteed, fixed contribution to creditors from Mr Takla.
If the company is wound up, “the related party loans will be pursued … However, it is likely that the recoveries in a liquidation will not be significant”, the report states, indicating that the prospects for unsecured creditors, many of which are aggrieved former clients, getting a return are not good in either scenario.
Describing the deal as “suspicious”, a source close to the matter, speaking to ifa on condition of anonymity, said the revelation that “cash appears to have been lent to related parties when claims had already been filed” and that “now those related parties are suggesting they have no ability to repay those loans” is highly concerning.
A former client and claimant against the firm went a step further, telling ifa the incident has shaken his faith in the insolvency and justice systems.
“George Takla is walking away scratch free, not paying anything and having a million dollar handshake ... from himself to himself, stripped funds out with no tax to pay,” the claimant said. “We are still paying the debt!”
The report also reveals that “two legal actions” are pending against the company, though ifa understands a number of former clients have sought legal action but are unable to afford to pursue a civil claim in the courts.
The claims against the firm relate to advice given to clients deemed to be in breach of the Corporations Act and untailored to the clients’ specific situations, including investment in failed agribusiness schemes such as the Willmott forestry project.
Australia tops ranking for client-friendly fees
Australia was one of the highest rated countries when it came to client-friendly...
Perpetual names distribution general manager
Perpetual Limited has appointed Franklin Templeton veteran Adam Quaife to the ro...
Fix advice with simpler SOAs: software provider
The government and regulator should consider simplifying the production of SOAs...