ASIC winds up illegal land banking investment scheme and associated entities

ASIC has successfully sought orders from the Federal Court to wind up Melbourne-based company Aviation 3030 Pty Ltd (Aviation) on the basis that there is a justifiable lack of confidence in the management of Aviation by its directors.

In ordering that Aviation be wound up, Justice O’Callaghan stated:

‘The case that ASIC makes to wind up Aviation is an overwhelming one … Directors have issued to themselves and to their associates large numbers of shares at a gross undervalue; they have fabricated correspondence and invoices; they have provided false instructions to the company’s external solicitors; they duped and misled investors; they entered into related party loans; and they made unauthorised and exorbitant expenditures. The audacity of the March 2016 share issue alone could well be enough to warrant a winding up order, but it is not necessary to decide the case on that sole basis because of the many and varied ways that the directors have demonstrated that they are unfit to sit on the board of Aviation.’

ASIC’s winding up application was opposed at trial by Aviation and its two majority shareholders (which were companies associated with *the directors of Aviation) to which 63% of Aviation’s share capital was issued in March 2016. ASIC’s application was supported, however, by a group of 12 minority investors who were granted leave to intervene in the proceeding.

The Federal Court also ordered the winding up of an unregistered managed investment scheme operated by Aviation through five separate trusts, as well as their trustee companies, which were also used to raise funds for the Aviation scheme. John Lindholm and George Georges of Ferrier Hodgson were appointed as joint and several liquidators of Aviation, the Aviation scheme and associated entities.

The orders have been stayed for seven days to allow the defendants to consider an appeal.

ASIC Commissioner John Price said, ‘The orders made by the Court will allow an orderly and lawful winding up of the companies and the investment scheme they have operated and will place the future process of distribution of funds to investors into independent hands. This action shows ASIC will intervene where directors prioritise their own interests above those of investors.’


Aviation’s primary asset is property located at 756 Aviation Rd, Point Cook, which it purchased for $7.8 million in 2011 with a view to rezoning the property to increase its value. To facilitate the purchase and rezoning of the property, Aviation raised around $10.59 million from approximately 73 shareholders and unitholders. On 13 September 2012, the Aviation property was rezoned from Green Wedge Zone to Farming and significantly increased in value. In March 2016, Aviation issued 63% of its share capital to companies associated with *the directors of Aviation.

On 25 October 2018, the property at Point Cook was sold to Shanghai-based developer, Dahua.

Following an investigation, ASIC commenced proceedings in September 2018 to wind up Aviation, the trustee companies and the Aviation scheme (18-286MR).

ASIC has targeted and wound up a number of land banking schemes due to concerns they are operating outside the law.  ASIC will continue to scrutinise investment schemes suspected of operating outside of the managed investment scheme legislative regime.

Editor’s note:

*Clarification: The reference to the directors is to Mr Hakly Lao and Mr Chong Huy Taing.

© Australian Securities & Investments Commission. Reproduced with permission.