Director pleads guilty to dishonest conduct

Dishonest conduct

A former director who used SMSFs in relation to the misappropriation of over $500,000 of client funds has pleaded guilty to dishonest conduct.

A former director has pleaded guilty to two counts of dishonest conduct and two counts of failing to discharge his duties as a director in the best interests of a company after convincing investors to roll over retirement funds into SMSFs and using the money for his own benefit.

Mudasir Mohammed Naseeruddin made the plea in relation to a matter being prosecuted by the Commonwealth Director of Public Prosecutions following an investigation and referral from ASIC.

The ASIC investigation found between 13 May 2015 and 6 January 2020, Naseeruddin dishonestly obtained more than $520,000 from six investors, convincing them to transfer their retirement savings into newly created SMSFs and to lend those funds to two companies, Secure Investments Pty Ltd and Aquila Group Pty Ltd, of which he was the director.

The monies were supposed to be used for property development purposes, but the corporate watchdog alleged only a small portion of the money was put forward for this purpose.

Additionally, between 14 July 2016 and 23 December 2019, Naseeruddin used his position as a director of Secure Investments to dishonestly withdraw over $550,000 from the company, which he subsequently used to buy shares in a security firm for his personal benefit.

In October 2020, the Federal Court ordered the winding up of Secure Investments, following an ASIC investigation that found Naseeruddin had breached the Corporations Act by operating a financial services business without holding an Australian financial services licence.

Subsequently, he was first arrested and charged in December 2020, after the regulator took civil action to obtain interim orders to freeze the assets of his companies, Secure Investments and Aquila Group.

The matter will return to court on 6 December for a plea hearing.

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