The Federal Court of Australia has adjourned its hearing on a case filed by former Sargon Capital founder Phillip Kingston, who is seeking an independent review by special purpose liquidators whether a Chinese state-owned conglomerate deliberately bankrupted his high-profile superannuation fintech through a complex legal trap.
The matter ended up “part-heard” on Friday January 28, according to the update on the court’s website, with the court ordering “by 17 February 2022, the First to Third Defendants notify the Plaintiff in writing as to their position with respect to the Plaintiff’s application dated 16 December 2021, including by filing and serving any application”, and “adjourned for a case management hearing on 4 March 2022”.
In a filling with the court, Mr Kingston asked Barry Wight and Stephen Earel of Cor Cordis to be appointed as special purpose liquidators.
Ashurst, China Taiping, McGrathNicol and Wexted did not return our requests for comment and more information on Monday.
In response to our enquiry, Mr Kingston attributed the adjournment to the defendants' requiring more time to formulate their legal position and objection to the appointment of special purpose liquidators.
“They cited Chinese New Year and delays in getting instructions from their Chinese clients as why they haven’t come up with a basis to object in the last 5 weeks. They admitted they did not currently have any basis to object”.
“[so] the hearing was adjourned to give Ashurst 2 weeks to try to find legal standing and then a basis to object. Given how much money they all stand to lose based on the findings, I didn’t want even the suggestion that we didn’t give them maximum due process which they denied me on every occasion”.
“Instead of answering a 1 line question which I’ve asked for 2 years, the liquidators respond with a 760 page affidavit to this SPL application and spend hundreds of thousands to squash the investigation, all while claiming they are without funds”.
“They are trying to stop my independent investigation at all costs which is a process that does not cost their receivership anything, just gets the truth out there.”
“None of China Taiping, Ashurst, McGrathNicol or Wexted have wanted to confirm how this $4.4M was used”, he added.
The $4.4 million reference is likely about the payment Sargon made in December 2019 to cover two now-disputed instances of default.
With more than $55 billion in assets under trusteeship and supervision and at a reported valuation of A$1 billion, Sargon Capital was all of a sudden placed into receivership by China Taiping in January, 2020 over what has since been disputed default on interests due (about A $1.7 million each in October and December 2019) on HK$500 million investment (promissory notes - worth about A$81 million at the time of funding).
The high-profile fintech counted big players among its board member, such as former Crown Resorts chairman Robert Rankin and former ALP senator Stephen Conroy
Since going public in March 2021, Mr Kingston has written his perspective of the dramatic events in blog posts, insisting no default subsisted and the two default events were deliberately engineered by misdirecting the payments he made.
In August, Liberal MP Tim Wilson tabled in federal parliament a file of documents suggesting a deliberate misdirection of interest payment to trigger an event of default for Sargon’s extraordinary collapse last year. Full transcript of MP Tim Wilson speech.
The Federal Court of Australia is scheduled to resume hearing the case on 4 March 2022.
