Information for Diversa Trustee Members on Falcon Capital and investments in First Guardian Master Fund

24 February 2025

On 24 February 2025, ASIC obtained freezing orders in the Federal Court over the assets of FC, including the FGMF. On 17 March 2025 ASIC applied for further orders in the Federal Court for the appointment of liquidators to FC and to wind up the FGMF.

10 April 2025

On 10 April 2025, the Federal Court appointed Ross Blakeley and Paul Harlond of FTI Consulting as Liquidators (Liquidators) of FC and ordered the Liquidators to wind up FC, the FGMF and related unregistered subsidiary funds. For more information, please see ASIC’s media release A receiver was also appointed to the personal property of one of FC’s directors.

7 June 2025

On 7 June 2025, ASIC cancelled the Australian Financial Services (AFS) license of Financial Services Group Australia Pty Ltd (FSGA) and permanently banned its Responsible Manager Graham Holmes. For more information, please see ASIC’s media release

Certain authorised representatives of FSGA provided personal financial product advice to consumers to invest in the FGMF.   Mr Ferras Merhi was the sole director of FSGA from 10 February 2021 to 30 May 2025. ASIC is investigating Mr. Merhi and various entities associated with him, in connection with its investigations concerning Shield and FGMF.

If you intend to lodge a complaint with AFCA in relation to advice received from Financial Services Group Australia or its authorised representatives, you should do so by 4 June 2026.

26 June 2025

On 26 June 2025, the Federal Court made interim travel restraint orders against FC directors, Mr. David Anderson and Mr. Simon Selimaj, prohibiting Mr. Anderson and Mr. Selimaj from leaving Australia until 27 February 2026. The Federal Court also made interim orders freezing the assets of Mr. Selimaj. For further information see ASIC’s media release .

8 July 2025

On 8 July 2025, the Liquidators issued their Statutory Report (the Report) to Creditors the purpose of which is to provide creditors of FC with an update on:

• The estimated amounts of assets and liabilities of FC.
• Inquiries relating to the winding up of FC that have been undertaken to date.
• Further inquiries relating to the winding up of FC that may need to be undertaken.
• What happened to the business of FC.
• The likelihood of Creditors receiving a dividend before the affairs of FC are fully wound up.
• Possible recovery actions.

You can access that report here: https://www.fticonsulting.com/creditors/falcon-capital-limited

The key points in the Liquidators Report as it relates to Unitholders include:

• Whilst the Liquidators have undertaken significant tasks, including initial investigations in relation to FC and the Funds, the Liquidation and the winding up of the Funds is still in its infancy with much still to be done and established.

•The Liquidators have expended considerable time in identifying assets of FC and the FGMF, and have taken steps in instigating and maximising the realisation of recoverable assets.

• The Liquidators have conducted preliminary assessments of the actual and contingent liabilities of FC and thus identified the potential Creditors of FC. This includes identifying and considering whether Unitholders of the FGMF may be creditors of FC to the extent they may have a claim for losses or damages against FC (including for a breach of its duties as Responsible Entity of the FGMF).

•Irrespective, it is recognised that Unitholders are important stakeholders in the winding up of FC (whether creditors or not), noting the Liquidators’ role under the Court Order is to also wind up the Funds.

• It is the Liquidators’ preliminary assessment that the Funds’ investments may not recover their ascribed book value as asserted by the Directors in their Report on Company Activities and Property (“ROCAP”). Further, the Liquidators consider the value of the assets may have been overstated in the accounts. It is very likely that some of the Funds ‘assets/investments are not recoverable or will not recover their full ascribed value. Indeed, significant shortfalls to book values are expected.

• At this stage, it is considered possible that a dividend may be paid to Creditors of FC and a distribution may be made to Unitholders in the FGMF in the future. However, for reasons including the nature of the assets and the commercial and legal sensitivities that exist in relation to their realisation, the Liquidators are not in a position to provide an estimate as to what the assets may ultimately realise and thus what funds may be available for distribution to Creditors and Unitholders.

• The Liquidators intend to undertake further investigations. This includes in determining whether any breaches of the Corporations Act or other laws have occurred by any party (including the FC directors), or other circumstances exist, which may give rise to a potential claim by the Liquidators.

• The Liquidators have and will continue to engage with the Australian Securities and Investments Commission (“ASIC”) in the conduct of the Liquidation, including lodging a report with ASIC regarding the findings from their investigations.

• Having noted the complexity of and the number of outstanding matters in the Liquidation, the Liquidators consider that the Liquidation and the winding up of the Funds will continue for and take some time to complete.

ASIC has a webpage to provide consumers with updates on its investigation into the management and operation of the FGMF and FC.

The page can be accessed here:

https://www.asic.gov.au/about-asic/asic-investigations-and-enforcement/enforcement-activities/first-guardian-master-fund/

The ASIC webpage includes a list of FAQs, links to updates and ASIC Media Releases.

Diversa is the trustee for the YourChoice Super, AusPrac Super and Praemium Super platform superannuation products through which members were able to use their superannuation to  invest in the FGMF.

In a platform product, members choose their investments from the platform’s investment menu (with the help of an adviser), but it is the trustee that holds the interest in the underlying investments on your behalf, in this case units in the FGMF.  Under this arrangement  the trustee of the specific platform product of which you may be a member is the owner of the FGMF units, and not you directly. This means that the platform and the trustee (in this case Diversa) will participate in the liquidation process in relation to interests in FGMF held through your superannuation fund (including lodgment of claim forms and otherwise participating in and monitoring the liquidation process).

For information about your investment in the FGMF you should contact the platform provider directly.  Contact details for YourChoice Super, AusPrac Super or Praemium Super are set out in response to section 6 below.

Investors can access the Report via FTI Consulting’s Creditors’ Portal at:

https://www.fticonsulting.com/creditors/falcon-capital-limited

Investors can contact the liquidators with any queries by emailing: [email protected]

The Liquidators have published a webpage where they are providing updates in respect of FC and the FGMF, which is available here .

This webpage has links to various updates and answers to frequently asked questions which have been published by FTI Consulting. We have included these links below for your convenience:

• Update for Unitholders – 8 July 2025
• Initial Information for Creditors – 12 May 2025
• FAQ for Unitholders – Updated 12 May 2025
• Initial Circular to Unitholders – 17 April 2025
• FAQ for Unitholders – 17 April 2025

We are unable to confirm any particular priority of distributions from the liquidation of FC. The priority of distributions is governed by the Corporations Act 2001 (the Act). Determining the prioritisation of distributions in large liquidations is often complicated and may depend on matters determined during the course of the liquidation or may be the subject of litigation by interested parties or applications for judicial advice. ASIC cannot instruct the liquidators as to the priority of distributions – the liquidators are independent of ASIC.

We appreciate this update may be distressing and are committed to providing updates as they become available.

At this time, while the Liquidator is working to assess and wind down the FGMF, there is no time frame for completion, and we recommend monitoring the links provided above.

If you have any questions, and you are an investor in the following platforms please contact the following client services teams:

YourChoice Super

• Email: [email protected]
• Phone number: 1800 571 881 (select option 5)

AusPrac Superannuation

• Email: [email protected]
• Phone number: 1800 571 881 (select option 5)

Praemium SMA Superannuation Fund

• Email: [email protected]
• Phone number: 1800 571 881 (select option 2)

On 27 May 2024, FC suspended the processing of applications and withdrawals from FGMF subject to some limited exceptions (FGMF May 2024 Update). Since that time, the majority of investors have been unable to access their funds.

The Federal Court appointed Liquidators to FC and ordered the wind-up of FGMF and its related unregistered subsidiary funds. ASIC sought orders to preserve the assets of the scheme so that they may be recovered, to the extent available, for the benefit of investors while the investigation is continuing.

The Liquidators are in the process of identifying the assets, their current position and the recoverability of the funds’ investments. The liquidators will keep unitholders informed and will provide updates on their website with respect to any material developments: See contact details for the Liquidators in response to question 3 above.

You cannot transfer or withdraw your investment, as all redemptions are frozen due to the current liquidation process to allow the assessment of the overall financial position of the fund and recoverability of the funds’ investments by the Liquidators.

The Liquidators have not provided a timeline for the liquidation and winding up process but have observed that recovery actions may take considerable time. Whether any money is returned depends on available assets, court outcomes and the results of liquidation and any recovery proceedings. The liquidators provided on 9 July 2025 an investor update which can be accessed via FTI Consulting’s Creditors’ Portal at:

https://www.fticonsulting.com/creditors/falcon-capital-limited

Please be alert as we are aware of emails impersonating professional firms that claim to be able to recover lost funds or provide compensation. These may include links to websites requesting login details and other personal or financial information.  We strongly recommend that you do not click on any links or respond to these messages or emails.

ASIC’s Moneysmart website (available ) includes guidance that unexpected contact, constant contact and pressure to take action or make a quick decision are warning signs of scams.

Moneysmart also provides guidance to hang up the call, or block emails or text messages if someone offers from a third-party organisation to recover lost funds or claims they can recover your losses for a percentage of the recovered losses or for a fee. Terms you should be wary of include ‘tax’,  ‘deposit’, ‘retainer’ or ‘refundable insurance bond’.

If you receive a suspicious message, you can report it to Scamwatch here: scamwatch.gov.au

The portion of your superannuation or pension that is invested in the FGMF will remain in your account while redemptions from FGMF are suspended. This suspension will apply regardless of whether you elect to nominate a new adviser on your account (or whether you did not previously have a linked adviser on your account).

If you wish to move your available funds to another superannuation fund, you can instruct your receiving superannuation fund to instigate a rollover or obtain the relevant forms from the relevant funds wesbite (subject to any minimum cash holding requirements).

For more information about minimum cash holdings please refer to the PDS for your product.

You will need to ensure you have sufficient cash holdings in your account to settle investment transactions, cover insurance premiums, fund pension payments and pay fees, where these are applicable to you.

Different cash holding requirements apply including minimum cash holding amount depending on which product you hold.  If you do not hold the minimum amount in cash, some of your investments may be sold to bring your cash holdings back up to the required minimum.

For more information about minim cash holdings please refer to the PDS for your product.

If your previously linked financial adviser has been removed from your account you will become a non-advised client.  Without an adviser you will need to contact the relevant client support or services teams to make account or investment changes using the contact details provided above in response to section 6 above.

You can appoint another financial adviser to your account by contacting the Client Service Team for your product using the contact details provided in response to section  6 above.  For more information about advisers and your account please refer to the PDS for your product.

Former clients of FSGA or its representatives still have the right to lodge a complaint with AFCA for up to one year from the date of license cancellation, provided the conduct occurred while the firm was licensed.

If you intend to lodge a complaint with AFCA in relation to advice received from FSGA or its authorised representatives you should do so by 4 June 2026. Further information in relation to FSGA’s license cancellation can be found on ASIC’s website: 25-102MR ASIC cancels AFS licence of Financial Services Group Australia.

Yes, advice fees in respect of FGMF have been switched off since December 2023.

As communicated to you in our letter in March 2025, deductions of Adviser Fees from accounts in relation to investments in the FGMF ceased in December 2023.

Diversa has suspended some administration fees charged over FGMF assets.

In February 2025, ASIC obtained freezing orders in the Federal Court in respect of the assets of the FC and the FGMF.  In response to this action Diversa changed the administration fees were charged to exclude interest in the FGMF.  This means that (subject to some exceptions) you have not been charged percentage based administration fees on your interest in FGMF since 1 February 2025. For more information about what fees and charges have been suspended please refer to our letter dated 19 March 2025. This letter can accessed by logging into your product’s online account.

For more information about the fees and costs associated with your account please refer to the PDS for your product.

If you send us instructions to roll over or withdraw your entire account balance, we’ll be unable to process that request, if it relates to an investment in the FGMF.

Please contact the Customer Service Team using the contact details providing in response to section 6 above, who will have further instructions on this.

Yes. The 8 July 2025 Liquidators’ report makes it clear that there is no ascertainable value for units in the FGMF (as at the date of the report).  As a result, the Trustee has determined that members’ interests in the FGMF should be given a zero value in the Fund. This means, in turn, that your account balance will, for the time being show a zero dollar value in relation to your individual exposure to FGMF, which may in turn mean your account balance will be close to zero.

This does not mean that the Trustee thinks the FGMF units are worthless.  It is because there is currently no ascertainable value for them. If and when the Liquidators provide further information which may enable a positive value to be ascertained, the Trustee would consider that information and whether your account balance should be adjusted upwards accordingly.

Pension payments (including TTR Pension payments) are calculated as a percentage of your account balance.  As noted in the response to question 19 above, your account balance will, for the time being, show a zero dollar value in relation to your interest in the FGMF (which may mean your account balance is close to zero). This, in turn, means your pension payments will reduce, in some cases significantly and, depending on whether there are any other assets attributable to your account, your pension payments may cease for the time being.

We understand this may be concerning, and we are committed to keeping you informed. If you have any questions about your account or what this means for your pension, please contact the Client Service Team for your product using the details provided in response to section 6 above.

If you hold insurance cover within your account or if you use your account to fund premiums for an external insurance product you will need to ensure you have sufficient balance in your Cash Account to cover the cost of the deductions or rollouts to cover the cost of those external premiums. If you don’t hold sufficent cash in your Cash Account to pay premiums your cover may be cancelled. For more information about insurance please refer to the PDS for your product.

Investors who apply for and are approved to receive a payment under financial hardship or compassionate early release grounds will still be required to have sufficient cash holdings in their cash account to make these payments. The funds that are frozen will not be able to be accessed or redeemed for the purpose of topping up your cash holding to meet these payments.

We understand this may be a difficult time for you. Further support is available if you need it.

• If you are experiencing financial difficulty, you can speak to an independent financial counsellor for free by contacting the (NDH) on 1800 007 007 (9:30am to 4.30pm in your local Australian time zone, Monday to Friday). The NDH may not be able to assist with your specific investment.
• You can also use ASIC’s Moneysmart website to search for a financial counsellor: (https://moneysmart.gov.au/managing-debt/financial-counselling)
• You may also consider seeking assistance from a registered financial adviser.

There are also a number of free professional services you can reach out to, including community legal centres who can provide free and confidential legal help. Find your closest legal centre at:

• VIC: https://www.fclc.org.au/find_a_community_legal_centre
• NSW: https://findlegalhelp.clcnsw.org.au/
• QLD: https://www.communitylegalqld.org.au/find-legal-help/
• WA: https://communitylegalwa.org.au/
• ACT: https://www.actlawsociety.asn.au/for-the-public/legal-help/community-legal-centres
• NT: https://www.legalaid.nt.gov.au/
• TAS: https://www.clctas.org.au/
• SA: https://www.clcsa.org.au/

It is important that we have up to date contact details for you, including your mobile and email address. If not, we may not be able to contact you about important matters in a timely manner.

To check your contact details are accurate please log in to the Secure Online Portal or Investor Portal for your product and update your details or contact your platform provider – please see contact details provided at section 6 above.

If you have concerns about the advice you received from your financial adviser, you can lodge a complaint by email with Interprac at:

• Telephone: (03) 9209 9777.
• Email: [email protected]

Diversa has an Enquiries and Complaints Policy. For a summary of the enquiries and complaints handling process, or if you have any

questions regarding FGMF you should contact your relevant customer services/support team:

YourChoice Super
PO Box 886
Wollongong NSW 2500
Phone: 1800 571 881 (option 5)
Email: [email protected]

Australian Practical Superannuation
PO Box 886
Wollongong NSW 2500
Phone: 1800 571 881 (option 5)
Email: [email protected]

Praemium Support
Telephone: 1800 571 881
Email: [email protected]

In most situations, you will receive an answer to your query over the phone.  A complaint can be made verbally or in writing and receipt of complaints will be acknowledged by the Fund. Upon receipt of a complaint, the matter will be investigated, and action is initiated to resolve the matter.

A written response will be made as soon as possible but within the timeframes prescribed by superannuation legislation.

For any complaint that is unable to be resolved to your satisfaction, or if you do not receive a response within the legislative timeframes (45 days from the date of making your complaint and 90 days for any complaint relating to a Death Benefit distribution), you can contact the Australian Financial Complaints Authority (AFCA).

Online: www.afca.org.au
Email: [email protected]
Phone: 1800 931 678 (free call)
Mail: Australian Financial Complaints Authority, GPO Box 3, Melbourne VIC 3001

Time limits may apply to complain to AFCA. You should act promptly or otherwise consult the AFCA website to find out if or when the time limit relevant to your circumstances expires.

AFCA is an independent complaint resolution service established by the government and free to consumers. AFCA’s contact details are:

If you are experiencing a mental health crisis and want to talk to someone straight away the following services operate 24/7:

Lifeline

Lifeline provides compassionate support for people in crisis.  You can contact Lifeline by:

• By Phone: Lifeline Crisis Support – 13 11 14
• Online chat: https://www.lifeline.org.au/crisis-chat/
• Text: 0477 13 11 14

 Beyond Blue

• Beyond Blue Support Service is available 24/7 for brief counselling and a variety of other mental health supports you can access. You can contact Beyond Blue:

• Calling a counsellor on 1300 22 4636
• Chatting to a counsellor online: https://www.beyondblue.org.au/get-support/talk-to-a-counsellor/chat

Aboriginal and Torres Strait Islander people

• 13YARN— call 13 92 76 to talk to an Aboriginal or Torres Strait Islander Crisis Supporter, 24/7.

For information about non-crisis counselling resources:

Mental Health Support

• You can access mental health support by visiting your GP and getting a mental health plan: Mental health treatment plan | healthdirect

• You can access up to 4 crisis counselling sessions with an independent experienced and qualified psychologist or counsellor free of charge, with services provided by Starlight Psychology – see text box at the top of this page.

Australian Psychological Society

• This website provides a listing of Registered Psychologists, including areas of specialty and location: Find a Psychologist | APS

Psychologists set their own fees so there may also be a gap between what Medicare will pay and what is charged. Some psychologists do not provide a Medicare rebate, so it is best to ask about fees prior to your session.

Services Australia

• This website explains how the Medicare system works in relation to accessing mental health care under the Medicare system: Mental health care and Medicare

1800Respect

1800Respect is the national domestic, family and sexual violence counselling information and support service.   If you are experiencing family violence including economic abuse you can contact the National domestic violence service:

• Call 1800 737 732
• Text 0458 737 732
• Chat online via the website https://1800respect.org.au/

Yes. Diversa considers the First Guardian Master Fund’s losses to have resulted from fraudulent conduct. Members of the YourChoice Super fund, the Australian Practical Superannuation fund and the Praemium SMA Superannuation Fund have suffered losses due to exposure to the First Guardian fund and the associated fraudulent conduct. Considering the circumstances of the First Guardian fund’s losses, Diversa has determined that it is appropriate to seek financial assistance from the Federal Government under Part 23 of the Superannuation Industry (Supervision) Act 1993 (Cth). Diversa is currently in the process of preparing its Part 23 applications.

Diversa considers that it is in the best financial interests of members to make these statutory applications and can confirm that any financial assistance provided will be applied for the benefit of affected members.