The director of an embattled funeral insurer that has left thousands of people without cover says he tried his best to save the company and protect its customers.
For three decades, Youpla Group — formerly known as the Aboriginal Community Benefit Fund (ACBF) — provided funeral insurance to help First Nations Australians give their loved ones a dignified burial.
Queenslander Greg Wheeldon took on the role as director in February 2021, as the company faced significant challenges.
The group of companies went into liquidation in March this year, leaving14,500 people without funeral insurance.
The liquidator's preliminary report, released on Friday, said it was investigating at least $53 million paid over two decades to companies associated with former director and co-founder Ron Pattenden, in what may have been an illegal use of his position.
Mr Wheeldon said he had never met or spoken with Mr Pattenden, and was asked to join the company due to his legal background and to find a way forward for the business.
Speaking publicly for the first time, shortly before the release of the liquidator's latest report, Mr Wheeldon told the ABC Mr Pattenden's history with the company should be investigated.
"I believe it's a matter the regulator should look at closely and, if possible, retrace the money for the pool of the [Indigenous people] and to put back into the funds if there is a case, and if it legally stacks up," Mr Wheeldon said.
The ABC met Mr Pattenden in New Zealand last month, where he declined an interview but vowed to tell his side of the story after he received legal advice.
Mr Pattenden has not responded to subsequent attempts to contact him, including detailed questions about the liquidator's findings.
Recent conduct in spotlight
Greg Wheeldon acknowledges the troubled past of Youpla Group.
"We can't go back and change history," he said.
When Mr Wheeldon arrived at Youpla Group, it faced an uphill battle.
It was made up of a number of different companies, and only one of these had any significant money left.
On one side of the ledger, Youpla Group could not take on new customers, after the government introduced licensing requirements for funeral insurers, off the back of the banking royal commission.
On the other, the company faced costly regulatory action and consumer complaints.
Consumer groups warned it was only a matter of time before it all came crashing down.
When the group collapsed in March, confusion reigned as 14,500 people across Australia stood to lose not just their cover, but also thousands of dollars in contributions.
Mr Wheeldon, 64, said he accepted the job for the money and the challenge and spent long hours putting together a complicated framework to amalgamate the companies.
"All documents had been done, had been drafted, it just needed goodwill and a desire by the regulators."
The planned consolidation also needed agreement from all 14,500 members, regulator approval, creditor approval, a re-insurer, and an Australian financial services licence.
Youpla had none of those things.
On the night of March 10, the company received a call from NSW Fair Trading to say the consolidation plan would not be approved.
The next day, the entire Youpla Group collapsed.
Mr Wheeldon said when he agreed to take on the role 16 months ago, he had not realised it would be so intense.
He said he had hoped until the end that a solution could be found.
"My sole driving ambition and that of my fellow director was the protection of the members.
"That's all we cared about."
But questions are also being raised about the company's more recent conduct.
'It is really disheartening'
On the other side of the country, while Mr Wheeldon was working behind the scenes, Vennessa Poelina was frustrated.
Ms Poelina, a Nyikina traditional owner from Broome, already knew Youpla was in trouble.
She had been a customer for more than two decades, and had a policy with Fund 2, which went into administration in November last year.
But she also had a policy with Fund 1, which was still operating.
"I rang ACBF — and it wasn't easy to get them on the phone either … and I said, 'What about my Fund 1 [policy], which is my daughters' contributions?'" Ms Poelina said.
"They said, 'Oh, no, that's all fine, you don't have to worry there, it's Fund 2 that's being liquidated.'"
But by February, Ms Poelina was concerned by the lack of communication from the company, and on the advice of her financial counsellor, stopped paying.
A month later, Ms Poelina received an email asking for payment.
Two days later, all Youpla's funds went under.
Ms Poelina had paid more than $20,000 to the company over more than two decades.
"You kind of want to feel angry, then you get frustrated and then you feel sad because now the cost burden is going to be on your family to look for money for your cremation," she said.
"But it is really disheartening."
The same day Ms Poelina received the email asking for payment, ASIC wrote to the company asking it to publicly clarify its financial position.
It also reminded directors of their duties, including "the prohibition on insolvent trading".
According to ASIC, a company is considered insolvent when it cannot pay its debts on time.
The ABC understands ASIC had also sent a letter to Youpla's directors a week earlier, before they went into liquidation, saying the regulator could not see how the company could meet its liabilities.
Alan Gray from Bush Money Mob said financial counsellors had been "vigorously" questioning whether the directors of Youpla had been trading while insolvent.
"I'm no lawyer, but the average bloke walking down the street in the bush would say, 'Well, yes, obviously they must have been trading while insolvent if they were greedily asking for more premiums just two days before they went into liquidation,'" he said.
"Normally [with] these corporate issues, there are shades of grey, but when you've got something as black and white as this, there's got to be some muscular, comprehensive action to help these victims."
Company directors have a duty to prevent insolvent trading and can face significant financial and criminal penalties, including jail time.
Mr Wheeldon denied the company had been trading while insolvent.
"No we were not," Mr Wheeldon said.
"I personally have dealt in insolvency law. We applied the rules of insolvency to our company."
Asked about the company's email seeking payment from Ms Poelina, he conceded it might not have been appropriate.
"Personally, at the time, I probably wouldn't have sent it … but we were, not to my opinion, and legal opinion, insolvent at that point in time."
'Our misery has just become an industry'
The new federal government has promised an inquiry into the company's collapse, which came after decades of questions around its sales practices to Aboriginal people.
But Bush Money Mob's Alan Gray said an inquiry did not go far enough.
"We need someone to actually bite the bullet and say, 'Yes, we will establish a fund to refund these 32,000 ripped off First Nations people.'"
Ms Poelina said she feared for the older people in her community and their families, who were financially at risk while the situation was sorted out.
"Aboriginal people in this country, our misery has just become an industry for anybody who's chasing vulnerable people," she said.
ASIC has confirmed it is investigating current and former directors, and Ron Pattenden is one of the key people of interest.
In a report released on Friday, liquidators SV Partners said it was still investigating $19 million in "dividend" payments made by the company since 2010.
The report said it appeared at least $11.7 million had been paid to companies controlled or associated with Ron Pattenden, while another $7.4 million was unaccounted-for.
The liquidator has asked financial crime agency AUSTRAC to provide information about the payments, which will be included in a report to regulators.
Liquidator David Stimpson also said he was investigating the relationship between Youpla and Crown Insurance — a company founded in Vanuatu by Mr Pattenden in 2002 to provide re-insurance to ACBF (as Youpla was then known).
According to the report, Crown Insurance was paid $41.3 million in premiums and paid out $17.6 million in claims over two decades.
This left a $23.6 million surplus — double the money Youpla had in its coffers as it faced demise.
Crown Insurance pulled out of the arrangement in February this year, two years after Youpla stopped sending the company premiums.
Mr Stimpson said "various directors" of Youpla may have committed a number of offences, including improper use of position and/or information to gain an advantage to the detriment of the company.
"I am continuing my investigations regarding the potential offences and will report these offences in a confidential report to ASIC," he said in the report.
ACBF has already faced three challenges from ASIC — first in 1999 for misleading and deceptive conduct and again in 2003 for breaking federal anti-hawking laws.
The latest court case — launched in 2020 — relates to its conduct from 2015 through November 2018.
Mr Wheeldon partially blames historical issues and the regulator's handling of the company for its demise.
"Perhaps if the regulatory agencies weren't so cranky at [former director Ron Pattenden] they wouldn't have been coming down as hard on the company as a whole," he said.
ASIC will not comment on the events leading up to the group's liquidation or the allegation that it would not work with the company to resolve the situation.
Mr Wheeldon also blamed the Australian Financial Complaints Authority (AFCA), who ruled in favour of 178 customer complaints against Youpla, costing the company millions of dollars in pay-outs in its final years.
"Most claims came down to boilerplates and the responses for all of them were basically boilerplate responses," he said.
AFCA's deputy chief ombudsman, Dr June Smith, said Youpla had agreed to AFCA's rules and was bound by its decisions.
"In every one of the 178 cases, an independent panel comprising an ombudsman, a consumer advocate and an insurance industry expert, found the ACBF companies had engaged in misconduct leading to financial loss, through a deliberate business strategy that unfairly targeted First Nations communities and misled First Nations policyholders."
She said AFCA had tried to work with the group of companies, but they "did not comply with their membership obligations, did not cooperate with the AFCA process and did not seek to resolve the concerns raised by policyholders".
While AFCA has paused adjudicating complaints against the company since its liquidation, the number of complaints registered now stands at more than 800.
In its report, SV Partners said the reason for Youpla Group's insolvency was AFCA complaints, ASIC's legal action, pressure from regulators about the group's solvency and the withdrawal of insurance underwriting by Crown Insurance.
