Commodities: Court orders return of passport to fund director

Munro, as director of RG Munro Futures and Starport Futures Trading Corporation in the USA (also in liquidation) were, The Australian Securities and Investments Commission alleges, under his primary or sole control.

In September last year, ASIC was granted warrants under the Corporations Act to search premises, looking for books and other documents which, the liquidators claimed, had not been handed over as required by insolvency law.

The various searches arose because investigations showed that there was a substantial sum unaccounted for: "Following the liquidator’s appointment to RG Munro in October 2008, ASIC received a number of complaints from both the liquidator and investors, alleging a lack of co-operation by Mr Munro in the liquidation process . Both parties also voiced concerns about the location of approximately AUD88 million in investor funds. Starport was placed into liquidation in April 2009."

There were also questions relating to some AUD100 million "lent to both companies for the purpose of futures investments." It is not clear if these two sums are discrete amounts.

At the same time as it obtained the search warrants, ASIC persuaded the Supreme Court of Queensland to require Munro to hand over any and all passports so that he could not leave Australia. The initial orders, made on 9th September, were made exp parte. On the return date, 14th September, they were confirmed and (a somewhat bizarre) order was made that ASIC "retain the property, books and records seized on 9 September 2009, pending a further order of the Court."

In part, at least, that further order came on 19th November when Munro's application for the return of his passport was resolved. But the result was a draw.

The Application was made on 20th August for the return of the passport and a lifting of travel restrictions. The Judge, Martin, J, reserved his decision and eventually handed it down on 1th November. He granted the return of the passport and the lifting of travel restrictions. So far, so good for Munro. But then Martin, J added a new condition: Munro is able to use his passport only if he first gives notice to ASIC of his intention to do so. That notice must be at least 14 days before his intention to travel.

And he doesn't get to hold his passport - the Court holds it: according to ASIC "if Mr Munro wishes to use his passport then his must give ASIC 14 days written notice. If ASIC does not take any action seeking to prevent him going overseas then, upon filing an affidavit deposing to the giving of notice and the absence of action by ASIC, his passport will be released to him by the Court. On his return, Mr Munro must then return his passport to the Court and the same conditions apply."