Australia’s superannuities have become a source of anger in recent weeks after it emerged the Commonwealth Superannuation Guarantee Fund, which is owned by Australian banks, had received a total of $4 billion in illicit funds.
The ABC understands that $2 billion of that was used to buy up the remaining $1 billion of shares in the Commonwealth super fund, which was set up in 2007 by the Howard Government and managed by the Commonwealth Retirement Age Scheme.
This was done in a scheme dubbed “diversification” and was intended to help boost the fund’s value and attract more investors.
The money was used, according to the ABC, to “double the number of investors” and “double its revenue”.
The ABC’s investigations have uncovered a number of serious breaches of Australian superannuations rules, including:The scheme is being investigated by the Australian Securities and Investments Commission and will be investigated by ASIC, the Commonwealth Attorney-General and the Attorney-Generals Department.
Investors have been told that a number will face a fine of up to $3 million if they are found to have breached their obligation to the scheme.
A spokeswoman for the Attorney General’s Department said it was “looking into this matter and is prepared to consider any action appropriate”.
The Australian Securities & Investments Commission has also been informed of the matter and will take action if it is appropriate, she said.
In its statement, the Australian Superannuants Association said it had been notified of the allegations and had asked the AG to investigate the matter.
“We expect the Australian Federal Police to continue their ongoing investigation into these matters,” it said.
“We are deeply concerned about the potential for future misconduct and the implications of the breaches for the future of the scheme.”
In a statement to the AP, ASIC said the AG had been informed that it had “concluded that there are appropriate offences to prosecute, and are undertaking an investigation to determine the facts of this matter”.
The Commonwealth superannuitures fund is the largest superannuated fund in Australia.
Its portfolio has grown from $12.4 billion at the start of 2016 to $28.9 billion at end-June, according the latest figures.