Wednesday 24 January 2007 LAWFUEL – Mr Jeffrey Lucy, Chairman of the Australian Securities and Investments Commission (ASIC) today announced that Mr Karl Suleman, former director of Karl Suleman Enterprises Pty Limited (KSE), has been sentenced in the New South Wales District Court to seven years and four months jail with a non-parole period of five years and six months. Mr Suleman, 45, was jailed after pleading guilty on 1 May 2006 to a total of 26 charges following an investigation by ASIC into the operations of KSE.
Mr Suleman was remanded in custody from that time. Mr Suleman pleaded guilty to 15 counts of making false statements after ASIC’s investigation found he induced 15 investors to enter into agreements and invest $3.185 million in KSE’s supermarket trolley collection business between April 2000 and July 2001. Mr Suleman also pleaded guilty to 11 counts of using false documents which induced one investor to invest $1million in the business. ‘The jailing of Mr Suleman sends a strong message that people who misuse investors funds will be pursued and punished,’ Mr Lucy said. ‘ASIC will always act against individuals who misrepresent information and deliberately mislead and deceive investors.’ Today’s sentence takes into consideration time previously served by Mr Suleman.
He will be eligible for parole on 31 October 2011. The matter was prosecuted by the Commonwealth Director of Public Prosecutions. Background Mr Suleman was involved in the business of trolley collection services for supermarkets located between Cairns and Adelaide. The supermarkets paid Mr Suleman an agreed fee, out of which he paid infrastructure costs and subcontractors to collect the trolleys. From December 1999 until November 2001 investments were sought from the public in the supermarket trolley collection business.
These investments took the form of a contract entitled ‘Financial Investment Agreement’, entered into between an investor and KSE. Mr Suleman was the sole director of KSE, which was incorporated in December 1999 to be the corporate vehicle for Mr Suleman’s expanding supermarket trolley collection business. He was also a director of all the companies within the Froggy group of companies (Froggy Group).
KSE was placed into voluntary administration on 12 November 2001, soon after ASIC commenced proceedings before the NSW Supreme Court to close down an unregistered managed investment scheme operated by the company. KSE and the companies within the Froggy Group have since been placed into liquidation. On 22 July 2002, Mr Suleman was ordered by the NSW Supreme Court to pay $17.4 million in damages to KSE. On 30 July 2002, Mr Suleman was declared bankrupt.
On 15 April 2004, Mr Suleman was sentenced in the NSW District Court to 21 months jail, with a non-parole of 12 months, in relation to four other fraud charges brought by ASIC. These charges resulted from an ASIC investigation into businesses in the Froggy Group, and concerned the provision of a false bank statement and making false statements to finance brokers with the intention of obtaining finance. He was released from jail in relation to these charges in March 2005. For further information contact: Jan Redfern Executive Director, Enforcement Telephone: 02 9911 2191 Mobile: 0411 119 210 Danielle Huck ASIC Media Unit Telephone: 03 9280 3407 Mobile: 0417 540 769
