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Tuesday, 10 December 2002
Page: 7648


Senator Sherry asked the Minister for Revenue and Assistant Treasurer, upon notice, on 20 August 2002:

(1) With reference to correspondence to Senator Sherry, dated 9 August 2002, in which the Australian Prudential Regulation Authority (APRA) stated that MIP funds were not invested in the Commercial Nominees of Australia Pty Limited (CNAL) Enhanced Cash Management Trust but in the Enhanced Income Trust (EIT): (a) was CNAL at any stage the trustee of the EIT; if so, when did CNAL cease to be the trustee of the EIT; (b) was this a result of being replaced as trustee by APRA or the Australian Securities and Investments Commission; and (c) who is the replacement trustee of the EIT.

(2) (a) What steps have APRA, Perpetual or Australian Unity Funds Management taken to ascertain whether fraudulent conduct or theft, within the meaning of Part 23 of the Superannuation Industry (Supervision) Act 1993, occurred in relation to investments by the MIP in the EIT; and (b) have APRA, for example, appointed an inspector to the MIP and/or the EIT.


Senator Coonan (Minister for Revenue and Assistant Treasurer) —The answer to the honourable senator's question is as follows:

(1) (a) No. (b) Not applicable. (c) EIT is an unlisted trust, regulated by ASIC.

(2) (a) APRA has appointed an independent law firm to review the evidence provided by Oak Breeze that losses in the EIT were as a result of fraudulent conduct of theft. AUFML as approved trustee for Freedom of Choice Masterfund (FOC) has not yet submitted an application for financial assistance under section 229. (b) APRA cannot appoint an inspector to the MIP and/or EIT, as they are unlisted trusts and are not regulated by APRA..