By Ben Butler Business reporter From The Age

Alleged Cayman Island Ponzi scheme Centaur Litigation, where at least $10 million has gone missing, is to be wound up.

The litigation funder’s Sydney-based adviser, Buttonwood Legal Capital, last week told investors it had discovered ”a number of financial irregularities in relation to certain funds within the group”.

Simon Franklin and Stuart Hackett of corporate advisory Dequity Partners joined the Buttonwood board in January, a month before financial news website OffshoreAlert raised concerns that Centaur was a Ponzi scheme.

Until early this month, a joint venture between Centaur and a company it funded, Jersey-registered Argentum Capital, had been bankrolling a Federal Court class action brought against the Commonwealth over an outbreak of equine flu that rocked the NSW racing industry in 2007.

However, the law firm running the case, Maurice Blackburn, ditched Argentum this month.

”We’ve secured alternative funding for the case from another major funder, who will replace Argentum subject to the finalisation of terms,” Maurice Blackburn class actions spokesman Cameron Scott said.

In an unsigned statement to investors, Buttonwood, which is registered in tax haven the British Virgin Islands, said Mr Frankin and Mr Hackett had identified the financial irregularities ”as a result of an internal audit and independent review”.

”The new management and its advisers are actively pursuing commercial and legal options to deal with these matters,” Buttonwood said.

An application had been made in the Grand Court of the Cayman Islands to wind up three Centaur companies – Centaur Litigation SPC, Centaur Litigation Unit Series 1 Ltd and Centaur Litigation Ltd, the company said.

It said it wanted to ”restructure” company operations and complete the group’s portfolio of ”potentially valuable legal actions”.

For more on this story go to: http://www.smh.com.au/business/alleged-cayman-island-ponzi-scheme-centaur-litigation-to-wind-up-20140525-38wpu.html#ixzz32kORYaL9

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