Islamic finance company under ASIC probe

A Sydney man suspected of misappropriating millions of dollars from Australian Muslims via a failed "Sharia-compliant" lender has been ordered by a judge to hand over his passport.

The corporate watchdog obtained the Federal Court order against Usman Siddiqui, the former head of Equitable Financial Solutions (EFSOL) which entered liquidation in 2019, to prevent him leaving the country.

"Until ... further order of the Court, the Defendant is restrained from leaving Australia," Justice Kathleen Farrell said in orders published on Friday.

Under threat of imprisonment, he was also ordered to disclose any financial institution accounts under his control, people he is indebted to and the amount owed, and an inventory of his assets and liabilities.

Siddiqui, whose company purported to provide Sharia-compliant credit, including car and home loans and investment services to Muslims in Australia, is under investigation by ASIC for potentially misappropriating funds belonging to EFSOL clients.

An affidavit tendered in the proceedings discloses the probe revolves around suspected breaches of company law and suspicion of dishonestly obtaining property or financial advantage.

The document, authored by ASIC investigator Paul Dunn and obtained by AAP, outlines the watchdog's concerns that in 2019 Siddiqui "caused approximately $1.4 million of EFSOL funds to be transferred to Goldyna (and entity related to the Defendant)".

ASIC suspects those funds "should have remained with EFSOL for the purposes of paying liabilities, or potential liabilities, owed to EFSOL clients".

The affidavit contends that - as at June 2019 - EFSOL had at least 161 clients owed around $14.7 million, comprising funds they were told would be invested in Sharia-compliant products.

At least 54 complaints had been made to the Australian Financial Complaints Authority about EFSOL, with 38 determinations made against it, according to the document.

ASIC's suspicions, as per the affidavit, are that when EFSOL got into financial trouble and clients wanted money back, Siddiqui moved it out of their reach "to his other controlled entity Goldyna, to himself and through his accounts with OzForex Pty Ltd to overseas entities".

"I think that there is a reasonably arguable basis for my suspicions (but) ASIC needs to do further investigative work to establish whether my suspicions are correct," the document states.

An initial investigation by the Australian Securities and Investment Commission into Siddiqui was shelved in late 2019 after he left the country but was reopened when he returned this year, the affidavit reveals.

The order banning Siddiqui from leaving Australia was needed, ASIC argued, due to concerns the ex-company boss was a flight risk, noting his history of frequent travel and business links to Dubai.

"It is crucial for the Defendant to remain in Australia for the purposes of advancing ASIC's Current Investigation."

EFSOL marketed itself as Australia's largest, international Islamic finance company and partly targeted the country's Somali community, according to a previous Daily Telegraph report.

Siddiqui has been contacted for comment via his legal representative.