APRA Executive General Manager Les Phelps today announced that APRA had succeeded in its application to the South Australian Supreme Court to have liquidators appointed to the Adelaide accounting firm Holloway & Co.

In September 2000, Justice Mansfield of the Federal Court made civil penalty orders against Holloway & Co and its principal, Mr Anthony Holloway, for conducting a scheme to avoid the in-house asset provisions of the Superannuation Industry (Supervision) Act. Holloway & Co failed to pay the $222,000 penalty imposed upon it to the Commonwealth as ordered.

Mr Phelps said, APRA must enforce the legislation we administer. We will not allow those who break the law to simply ignore the orders that a court makes against them. The orders we obtained in Adelaide provide a signal for others in the superannuation industry, and in the finance sector more broadly, that APRA will vigorously pursue breaches.

The joint liquidators appointed by the Court are Mr Peter Macks and Mr Mark Hall of the insolvency firm Prentice Parbury Barilla.

Background information:

The Federal Court ruled that Holloway had operated a scheme for his clients whereby a business would make a contribution to a superannuation fund, which would then invest the money into a unit trust. The unit trust would then send the money back to the business. Thirty-two round-robin transactions involving 19 superannuation funds were considered by the Federal Court.

Mr Holloway was subjected to a civil penalty order of $35,000, which he has paid. APRA is also entitled to recover from Holloway and Holloway & Co 35 per cent of its costs of and incidental to the action.

APRA declared 18 of the 19 funds involved to be non-complying for taxation purposes. That means that all the tax concessions they had previously received were clawed back from them by way of an effective tax rate of 48.5 per cent on all their accrued assets.

APRA also disqualified Mr Anthony Holloway and his former employee Mr Simon Dalgleish from auditing superannuation funds, and referred them to their professional bodies for consideration of whether further disciplinary action was appropriate.

For further information contact:

Gloria Peterson Public Affairs Manager 02 9210 3385 or 0419 250 286