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AS 7800 investors nervously await news of their investment in the failed Fincorp Group ahead of a creditor’s meeting tomorrow, it has been revealed the group’s would-be white knight also has a chequered past. Leslie Freeman, the managing director of First Capital Group — the company that was in exclusive negotiations to buy Fincorp as recently as last Friday — oversaw the failure of a $29 million high-risk property group two years ago.

Mr Freeman previously controlled the failed Co-Develop Group, which was placed in receivership by the corporate regulator for operating illegally.

Mr Freeman’s current company, First Capital Group, invests in high-risk property development loans through its First Capital Securities arm and currently controls about $40 million of investors funds, offering high annual returns of up to 9.95 per cent.

The failed Co-Develop group raised money from the public to invest in high-risk property developments — offering annual returns of between 35 per cent and 100 per cent.

Receivers KordaMentha were appointed to Mr Freeman’s Co-Develop Group and its eight related companies in December 2004 following action by the Australian Securities and Investments Commission.

ASIC alleged Co-Develop Group operated an unregistered managed investment scheme, did not hold an Australian Financial Services licence, offered securities without a current disclosure document and engaged in conduct “that was misleading and deceptive or likely to mislead or deceive”.

Mr Freeman had been the executive director of Co-Develop and his wife Kylie Freeman was the group’s sole director.

ASIC said Mr and Ms Freeman had undertaken not to seek “any further money from investors for the (Co-Develop) schemes”.

But the watchdog said it had taken no further action to prevent Mr Freeman raising funds from investors, except through Co-Develop and its related entities.

First Capital Group, of which Mr Freeman is currently managing director, announced two weeks ago it had entered an agreement to buy the Fincorp Group for $5 million and had lent the struggling company $3 million.

Fincorp, which has raised about $200 million from investors, was placed in voluntary administration on Friday night after The Australian on Thursday sent a series of written questions concerning the group’s poor financial position to 11 past and current directors.

Mr Freeman said ASIC’s allegations of improper conduct concerning Co-Develop had not been proven because they were not tested before the court as he had consented for KordaMentha to take control of Co-Develop.

“They were allegations that were made that were never proven in court — we never got before a judge in the matter,” Mr Freeman said.

He said First Capital Securities was different to Fincorp because no related party was allowed to borrow from the group’s financing arm. “Of the $200 million Fincorp has raised from the public, about $170 million of that was used in related party transactions,” Mr Freeman said.

KordaMentha receiver Lachlan McIntosh said at the time Co-Develop was ordered to be wound up, it would have delivered investors “10c or 20c in the dollar”.

First Capital Group owns a 20 per stake in wealth seminar firm Empowernet International, which has exclusive rights to market “motivational speaker” Anthony Robbins in the Asia-Pacific region.