On 28 April 2009, the SFC has commenced proceedings under Section 213 of the SFO against 11 defendants seeking the appointment of administrators and injunction orders over a group of companies and individuals related to Descartes Athena Fund SPC, a private hedge fund.
The SFC alleges that the Athena Fund is a segregated portfolio company incorporated in the Cayman Islands and that Descartes Investment Management Ltd had been appointed to act as its investment manager. Descartes Investment Management Ltd, in turn, delegated all functions and powers to Descartes Global Asset Management Ltd, which was the investment adviser of the Athena Fund. The SFC suspects the Athena Fund had raised approximately USD$104.9m from 313 investors in subscriptions and is concerned because it appears:
- operators of the fund purported to liquidate the Athena Fund in July 2008 when pressed for redemptions and used what appear to be false documents from a major accounting firm; and
- false statements of account and subscription contracts purportedly issued by the fund administrators were sent to investors.
The court has appointed interim administrators, who will take possession of the companies’ records and bank accounts, recover money illegally transferred from the Athena Fund and report to the court. The court also granted an injunction order to freeze assets of up to US$90.6m in relation to two individuals and companies related to and/or operated by them.