by Ken Gargett

More than 3,000 investors in the failed managed investment scheme (MIS) operated by Western Australia’ Palandri Wine Group (PWL), look likely to lose in excess of A$160m ($137.6m/€94m).

PWL's administrators, Deloitte, recently made application to the Supreme Court of Western Australia to wind up the company, described as “hopelessly insolvent”. PWL is the responsible entity for six MIS, as well as other companies within the group. Deloitte was first called in, in February, by the Queensland Public Trustee on behalf of some 100 investors who had contributed $16m.

A MIS is a fund where a number of investors have contributed money in respect of a common enterprise. A responsible entity operates the scheme, which is regulated by Federal legislation. They are common in Australian agricultural investments.

Deloitte announced that their "investigations found that all the MIS are either insolvent on a cash-flow basis, a balance sheet basis or on the basis of the accounts kept by PWL, have no assets or liabilities.” They have been unable to attract any interest in respect of a replacement responsible entity and advised that by winding up the MIS, they “may be able to complete the sale of the PWL’s vineyards at Margaret River and Frankland River.” Deloitte hopes the sale will bring approximately $5m, however, it is considered “highly unlikely” that members will see any of the proceeds, as secured creditors will take priority.

In further news, the Australian Securities & Investments Commission is investigating the actions of the PWL directors, as Deloitte had “uncovered “irregularities” in the conduct of some of the schemes. In particular, it appears that there are instances of the same vineyard lots being leased to two different groups under two separately titled schemes, without either group’s knowledge.

Further hearings will take place on September 3.