ASIC charges ex-BBY CEO with fraud

Arunesh Narain Maharaj, the former Chief Executive Officer of BBY Limited, a now-defunct stockbroking firm, appeared in Sydney’s Downing Centre Local Court on charges of aiding, abetting, counseling, or procuring fraud.

The Australian Securities and Investments Commission (ASIC) alleges that Mr. Maharaj facilitated deceptive actions by another former BBY employee, leading to a financial advantage for the firm from St George Bank, a division of Westpac Banking Corporation.

BBY was suspended and liquidated in 2015

According to the ASIC, the alleged fraud centers on BBY’s unauthorized drawing of additional funds from an overdraft facilitation account held with St George Bank. Mr. Maharaj has been charged with two counts, which are contrary to sections 192E(1)(b) and 346 of the Crimes Act 1900 (NSW).

The first count pertains to funds drawn at the end of June 2013, and the second to additional funding between November 2014 and early 2015. Each of these charges carries a maximum penalty of 10 years’ imprisonment. The case has been adjourned for further mention until December 5, 2023, and is being prosecuted by the Commonwealth Director of Public Prosecutions.

BBY Limited was once an operational stockbroking and financial services firm but entered voluntary administration on May 17, 2015, and was subsequently liquidated on June 22, 2015. The liquidation revealed significant client shortfalls. ASIC suspended the company’s Australian Financial Services (AFS) licence in May 2015, a suspension that remained until the licence was ultimately canceled in June 2021.

ASIC has stated that its investigation into the activities of BBY Limited remains ongoing. The charges against Mr. Maharaj may shed light on broader irregularities within the firm, providing a cautionary tale for oversight and governance in the financial industry.