ASIC launches investigation into collapsed Bathla Group
Australia's corporate watchdog has launched a formal investigation into the affairs of collapsed Bathla Group, a sprawling property empire comprising more than 500 companies.
"I can confirm we have commenced a formal investigation in relation to the conduct of the affairs of the Bathla Group," Simone Constant, commissioner for the Australian Securities and Investments Commission (ASIC), said in a statement.
The regulator has not disclosed the specific conduct under investigation.
ASIC has also been examining the role of private lenders in Bathla's collapse, including how billions of dollars were raised and whether retail investors have been exposed to losses.
"We are making inquiries in relation to private lenders but have not commenced any formal investigation at this stage."
Administrators of the Bathla Group have been given up to another year to run the voluntary administration. (ABC News: Berge Breiland)
Billions owed to creditors
Bathla, one of Sydney's largest residential property developers, entered voluntary administration on August 25 owing creditors at least $3.4 billion.
The collapse has left the future of more than 200 projects in doubt, including roughly 2,000 homes under construction and another 13,000 in its development pipeline.
Construction has ceased across the group's projects, while administrators Teneo are pursuing the orderly sale of undeveloped land and other assets.
Private lenders have been moving to seize control of Bathla properties used as security for their loans.
The NSW Supreme Court has granted administrators until September next year to convene the second meeting of creditors, giving them more time to investigate the group's complex financial affairs.
Bhart Bhushan is listed as the sole director of Universal Property Group, which trades as Bathla. (ABC News)
ASIC scrutiny
The corporate regulator has been examining Bathla for several months, including the group's borrowing arrangements and whether any misconduct had occurred.
Before Senate estimates last month, ASIC chair Sarah Court said the regulator was working closely with administrators to trace the loans to Bathla across its more than 500 companies and 40 lenders.
Speaking at a parliamentary joint committee into financial services in early September, Ms Court said ASIC been engaging with Bathla and its administrators for the past month and was examining whether any misconduct took place.
The formal investigation into the company comes amid a broader crackdown on private credit.
On Monday, ASIC issued interim stop orders against two Angas Securities funds over disclosure concerns, including one fund's exposure to Bathla Group.
ASIC previously investigated the property developer in 2011 over alleged unconscionable lending practices resulting in Bathla co-founder Bhart Bushan and Universal Property Group, Bathla's main corporate entity, agreeing to a compensation scheme for affected homebuyers.
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