The Australian Prudential Regulation Authority (APRA) today announced it has accepted an enforceable undertaking from former Trio Capital Limited director Kurt Groeneveld. Trio was formerly the licensed trustee of registered superannuation entities and the responsible entity of various managed investment schemes.
Mr Groeneveld (DOB: 1 April 1964) was a non-executive director of Trio from November 2005 to April 2007, prior to Trio’s collapse in 2009.
APRA is concerned that Mr Groeneveld may have contravened the Superannuation Industry (Supervision) Act 1993 by failing to carry out his duties properly as a director of a superannuation trustee.
Mr Groeneveld has acknowledged APRA’s concerns. Mr Groeneveld has undertaken not to act as a trustee or as a responsible officer of a body corporate that is a trustee, investment manager or custodian of an APRA-regulated superannuation entity for a period of three years and six months.
APRA’s concerns in relation to Mr Groeneveld include that during his tenure as a board member of Trio:
- there was a failure by the Trio board to cause Trio to cease making investments with related-party investment managers and in related-party investments, and to redeem existing investments that had been made with related-party investment managers and in related party investments where:
* there were liquidity risks associated with the investments;
* the investments had been made on the basis of insufficient due diligence and in the absence of independent recommendations;
* there was inadequate monitoring in connection with the performance of the related-party investment managers and in respect of the related-party investments; and
- further investments were made with the related-party investment managers and in the related party investments.
The superannuation entities’ investments in these related-party investments have not been able to be redeemed. The Acting Trustee appointed to the Trio superannuation entities — ACT Super Management Pty Limited — does not expect that the investments will be recovered.
Mr Groeneveld has expressed regret at the consequences of the matters that are the subject of APRA’s concerns and the losses caused to members of the superannuation entities from the failure of the investments in the related parties.
APRA Member Helen Rowell said that the acceptance of an enforceable undertaking was an appropriate resolution of the matters between Mr Groeneveld and APRA.
‘APRA relies on superannuation trustees to carry out their duties and act in the best interests of members. APRA will continue to pursue directors who fail to meet their duties to ensure that they do not continue to operate in the superannuation industry, so as to maintain confidence in the superannuation system,’ Mrs Rowell said.
A copy of the enforceable undertaking is available on APRA’s website.
A total of 12 former Trio directors have now each provided an enforceable undertaking to APRA, which effectively removes these individuals from operating in the superannuation industry for a specified period of time.