Australian Unity funds fraudulently misrepresent fees

Australian Unity Limited (AYU.AX) is a fund manager engaged in related party fraud, with its various funds "investing" in each other. By using internal crossholdings, Australian Unity charges management fees many times in excess what it discloses in Product Disclosure Statements, and inflates the asset base upon which it issues units. This is deliberate fraud.

Page 6 of the Product Disclosure Statement of the Australian Unity Pro-D Balanced Fund, reports (negotiable) management fees of 0.65%. However, Australian Unity siphons money from Pro-D into various other related party funds, charging management fees several times over as part-owner of "investment partners" including Acorn Capital. This fraud allows Australian Unity to charge fees many times higher than it discloses, and inflates the fund's asset base. The  magical get-out-of-jail card Australian Unity relies on is tucked into the last page of the PDS, where it says "The fund may also invest in other Australian Unity Investments managed funds".

Of course such a clause in no way frees the criminal directors from their fiduciary duty. Their related party "investing" is illegal, regardless of the clause. Nor can the clause be used to justify underreporting the fees charged. If such a clause could legally be used to hide fees, then all funds could report zero fees in disclosure documents, while having a centipede of intermediaries charge undisclosed fees. The clause is not lawful as it would invalidate the entire disclosure regiment. There would be no point in fee disclosure if such a clause could be used. But as long as ASIC protects the Australian Unity criminals, they can underreport the fees of their funds using fraudulent PDS.

Acorn Capital recently launched a listed investment company to join the circular investment cartel. The Acorn Capital Investment Fund Limited (ACQ.AX) charges 1% of assets plus a performance fee. Naturally, the criminals immediately siphoned money from Australian Unity funds into this new fee-charging intermediary, including money from the Pro-D Balanced Fund. This was a deliberate act of fraud.