Financial watchdog suing former Port Douglas luxury resort developer
Super fund
The developer behind a failed Port Douglas five-star resort plan is being sued by federal financial watchdog the Australian Securities and Investments Commission.
ASIC alleges four former directors and compliance committee members of Keystone Asset Management including developer Paul Chiodo - who was behind the now-scrapped $300m Port Douglas resort planned for the about 2ha vacant block at 71-85 Port Douglas Road - failed to meet their obligations in relation to more than $530m in retirement savings from about 5800 investors in the superannuation fund Shield Master, which was operated and managed by Keystone.
More than $300m of those funds were transferred to a related property development fund controlled by Keystone Asset Management, before being transferred to entities linked to Mr Chiodo and another director Ilya Frolov, ASIC alleges.
An ASIC investigation previously alleged more than $100m for the planned $300m Port Douglas resort was lent out by Shield Master before it collapsed in 2024, despite that project only ever making the "pre-development stage" and being rejected by Douglas Shire Council.
After announcing the court action, ASIC chair Sarah Court expressed concern about how hundreds of millions of dollars of super savings were handled and protected.
“Investors in managed investment schemes are entitled to expect that their investments will be carefully managed on their behalf but, in this case, ASIC alleges investors were exposed to conflicted arrangements and poor oversight,” Ms Court said.
"We allege hundreds of millions of dollars of superannuation was transferred to related entities without basic safeguards, exposing thousands of Australians to significant financial risk.
"These proceedings are about holding those we allege to be involved to account and sending a clear message that directors operating schemes of this kind must act in investors’ best interests," she said.
The Port Douglas block has since been sold off by liquidators and developers Seymour Land intend to build an about 40-home housing estate called Sanctuary Greens there.
Newsport has reached out to Mr Chiodo for comment.
