Superannuation Fund Active Super is facing a lawsuit for allegedly misleading investors with its coal and Russia investments. The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against the fund, claiming that it marketed itself as ethical, responsible, and free from investments in Russia when it actually invested in coal companies and Moscow-backed resources firms Gazprom and Rosneft.
According to ASIC, Active Super engaged in misleading conduct between February 2021 and June 30 this year. During this period, the fund reportedly held shares in Whitehaven Coal and Coronado Global, in addition to having exposures to Skycity Entertainment, Pointsbet, Tabcorp, Star Entertainment, Shell, and New Hope.
Active Super, with a total value of $13.5 billion, had previously stated that its investments avoided gambling and oil tar sands. In May last year, the fund announced it would add Russia to its list of countries it would not invest in following the invasion of Ukraine. Then Treasurer Josh Frydenberg urged all funds to review their holdings and divest from Russia.
The ASIC claims that when super funds make claims about exclusions, they must have evidence to back those claims and ensure that they are not promising exclusions that they cannot deliver. ASIC Deputy Chair Sarah Court emphasized the importance of super funds having evidence and not making false promises to attract members.
As the lawsuit unfolds, Active Super faces scrutiny for its alleged deceptive marketing practices. The legal action highlights the need for transparency and accountability within the superannuation industry. Investors rely on accurate information to make informed decisions about their investments, and misleading conduct can have serious consequences.
It remains to be seen how the lawsuit will progress and what implications it may have for Active Super and the wider superannuation industry. The case underscores the importance of regulatory oversight and the need for investors to conduct thorough due diligence when choosing a superannuation fund. Transparency and honesty are crucial when it comes to financial institutions managing people’s retirement savings.
