Another class action lawsuit has been lobbed against the former stockmarket-darling fund manager, and its big four auditing outfit.
Fallen funds management outfit Blue Sky wrongly accounted for performance fees from a student accommodation venture and a loan for ultimately fizzled footwear venture Shoes of Prey, according to a new lawsuit.
It targets Brisbane-based Blue Sky, once an ASX-listed darling valued at more than $1 billion and which oversaw funds for ventures from burrito stores to student accommodation. Blue Sky’s former wunderkind chief executive Robert Shand, former chairman John Kain and big-four auditing firm EY are also named as defendants.This is the second class action against the failed company, directors and EY.
Among examples cited was one of Blue Sky accounts accruing or recognising performance fees as revenue when the actual financial performance outcome of the underlying funds was “not highly probable or probable”, or had not been met or could not be reliably measured.“Valuations were prepared on an ‘as if completed’ basis in circumstances where for some sites work had not been completed, access had not been granted and land had not yet been acquired,” the claim said.
Blue Sky did not provide a breakdown of its fee-earning assets until May 7, 2018 when it disclosed that about half its assets consisted of private real estate, of which half was in the form of third-party debt., dispatched research in March 2018 casting doubt on areas from how Blue Sky was valuing investments to the assets under management.The class action lawsuit accused Mr Kain of misleading conduct in issuing a rebuttal to the Glaucus report.
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