Friday, 6 December 2013

Avestra Asset Management launches new circular investment fraud

ASIC has for years done absolutely nothing to stop circular investment scams where associated funds "invest" in each other instead of investing in actual assets. As a result, such securities fraud is now endemic in the Australian funds industry, with new scams emerging daily. Avestra Asset Management recently launched yet another scam of this type. Avestra runs the managed funds Avestra Advantage, Canton Mackenzie and Worberg Global. Using money entrusted to these funds by gullible investors, Avestra took over listed funds manager Excela (EXA.AX), now renamed AG Financial (AHA.AX). After gaining control, Avestra had the managed funds Excela Maximiser and Emergent "invest" in Avestra Advantage and Worberg Global. This is blatant securities fraud, and would have led to arrests in other countries.

Avestra Advantage and Worberg Global were issued AHA shares at $0.02. Avestra then ramped AHA to $0.04 in late June 2013 on no volume, artificially inflating the NTA of its funds. As a result of this revaluation fraud all Avestra funds now have fraudulent NTAs.

On semi-functional websites that look like they were designed by someone paid five dollars, perhaps a freelancer, Avestra funds claim to offer high returns, low volatility and capital growth. The claims of low volatility seem strange, given that Canton Mackenzie's NAV fell 16% in the single month of February 2013, as did Avestra Advantage. These funds have extremely suspicious returns. Worberg Global was ramped up around 50% in August 2012, while Avestra Advantage was ramped 28% in the same month.

The funds have entirely fraudulent returns as they are circular investment scams. As long has Avestra has net investor inflows, its funds can claim any monthly return they want to. If Avestra's investors were to try and cash out, however, the inflated prices could not be maintained by the criminals, that reportedly have extensive experience in shady business deals and gender-bending.

Avestra only had to spend a few million dollars of other people's money to gain control over Excela's $22m in managed funds and plunder them. Excela's previous management sold its granny investors for a confidential amount to Avestra, according to page seven of its annual report.

ASIC will allow this fraud to continue until it blows up, at which point it will deny any responsibility. ASIC goes beyond incompetency here.


  1. Akbar Alikhan, now there's a name you can trust.

    1. Trust a man claiming to be nine years younger than his father? Why, of course.

      It's funny though, Scrutinizer, how small the world of Australian financial crime is, the same names keep popping up again and again. I have devised a parlor game called "Six Degrees of Wilson", linking every share market fraud to WAM in six steps or less.

      For example, starting with wildy ramped new scam TOP, TOP has a substantial stake in DDT, in which control fraud was attempted by Bannaby Investments, which has a substantial stake in CDM, which is associated to WAM.