Pair in hot water

By Paul Dunlop
TWO Cardinia financial service providers are being pursued by Australia’s top corporate watchdog over the misuse of millions of dollars in superannuation funds.
Barry John Patrick of Pakenham and Karl Heinz Hermann Veljkovic of Beaconsfield are at the centre of an Australian Securities and Investments Commission (ASIC) action that last week saw three Melbournebased companies sent into liquidation.
ASIC has taken action against Mr Patrick and Mr Veljkovic over concerns that funds totalling at least $2.5 million are at risk and may have been lost. The commission alleges that between May 2003 and January 2006, Mr Patrick and Mr Veljkovic advised investors to roll over their superannuation into a selfmanaged fund and then invest in companies either operated by or associated with them.
ASIC says none of the investors has been repaid.
Following a hearing at the Federal Court of Melbourne on Wednesday, Mr Patrick and Mr Veljkovic were restrained from conducting a financial service business or managing corporations.
The commission sought that the two men be banned for a period of 20 years.
ASIC said that Mr Patrick consented to a 20year ban while Mr Veljkovic agreed to an interlocutory injunction in those terms, pending the outcome of the court action against him.
The three companies sent into liquidation were EKB Properties Pty Ltd, Sandgrove Specialised Securities Ltd and Cardinia Specialised Securities Ltd.
ASIC claims all three companies allegedly misused superannuation funds.
All three were said to be either operated by or associated with Mr Veljkovic and Mr Patrick.
The Federal Court appointed Simon WallaceSmith and Timothy Bryce Norman of Deloitte as official liquidators.
ASIC said it sought the appointment of liquidators to ensure that the best interests of investors and creditors were considered independently.
Mr WallaceSmith told the Gazette it could be some weeks before their investigations would be complete.
He said it was too early to tell the likely outcome.
“It’s early days yet, these things do take some time,” Mr WallaceSmith said.
Neither Mr Patrick nor Mr Veljkovic could be contacted for comment.
The Federal Court action was unopposed by the three companies.
Under the court order, Mr Patrick and Mr Veljkovic are also unable to transfer, dispose of or otherwise part with any funds that have come into their possession by them issuing, selling or offering a financial product.
ASIC is also seeking that the two men be found guilty of contempt of court after allegedly breaching previous Federal Court orders.
This matter has been adjourned to 16 March in the Melbourne Federal Court.