Perth-based Westpoint Funds Management is currently in discussions with a financial services group regarding a distribution joint venture despite another action taken by ASIC last week which will require the group to totally rewrite the PDS for its flagship income fund.

Westpoint has incurred the wrath of the regulator several times in the last couple of years for its offering of promissory notes on the Emu Brewery Mezzanine and Bayshore Mezzanine projects. ASIC first asked Westpoint in April 2004 to cease offering promissory notes and amend their methods to produce financial products which would require a PDS. Negotiations regarding the joint venture are continuing unaffected, according to Stephen Karrasch, head of funds management. “It’s business as usual,” he said. Karrasch joined the group as head of funds management in February and Westpoint has been building its asset management division since June when it ended a distribution arrangement with Krystyna Weston’s The Private Collection. Karrasch was previously head of wealth management at Sagitta. “In conjunction with ASIC, Westpoint Management has prepared a new Product Disclosure Statement (PDS) containing updated disclosures, performance history, further definitions, a notice of change of director and more detail regarding the investment process. “The new PDS is awaiting the finalisation of the audited accounts and, as a result of this process, ASIC has placed a full stop order on the current Income Fund Product Disclosure Statement pending the lodgement of the replacement Product Disclosure Statement,” Westpoint said in a notice to clients. ASIC has commenced legal proceedings against Westpoint’s York Street Mezzanine project seeking a winding up of the company and the appointment of a provisional liquidator. That action does not affect the funds management operations but in a separation action ASIC is also seeking orders for the lodgment of financial statements by the WestPoint Income Fund. ASIC has put a full stop on the fund and the accounts must be lodged by December 14, 2005. Karrasch said the accounts were currently being audited and should be lodged before the middle of December. Westpoint Funds Management team currently has 12 members and recently appointed David Jones to the position of chief operating officer. Karrasch said the group was also looking to grow the group organically. The Westpoint Group has also appointed Terrence Snape as head of risk and compliance.

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