The ASIC (Australian Securities and Investments Commission) has initiated legal proceedings in the New South Wales Supreme Court against Newcastle Palais Holdings and Empower Invest for violation of enforceable undertakings.

After an investigation conducted by the ASIC, the court decreed around two years ago that Newcastle Palais Holdings and Empower Invest and their respective executives, Brien Cornwell and Kenneth Watson, had ventured in a managed investment program associated with Newcastle property development without due registration or a licence for Australian financial services.

The ASIC then agreed to enforceable undertakings from the two companies wherein they consented to let investors know of the scheme and the concerns of the ASIC, and give back money to investors who accept the offer.

Newcastle Palais Holdings and Empower Invest must also report any requested refunds and paid back sums to investors to the ASIC.

While Newcastle Palais Holdings and Empower Invest complied partially with the decreed undertaking, they did not pay back the investors as agreed.

The investment scheme a total of $769,500 from ten investing parties, and the investigation conducted by ASIC found that other offers had been conferred to other investing parties to put in some money to the scheme.

The issue is expected to return to the New South Wales Supreme Court this week on July 22, Thursday.