Merlin Can’t Possibly Possess Enough Magic for Gutnick’s Great Escape, ASIC Turns Up Heat On Diamond Company

ASIC liquidator push turns up the heat on Diamond Joe Gutnick

Australia’s corporate watchdog has sought Federal Court approval to wind up Joseph Gutnick’s publicly-listed company, Merlin Diamonds, and flagged an inquiry into whether the colourful Melbourne businessman has breached his director’s duties.

The Australian Securities and Investments Commission’s (ASIC) move against the man known as “Diamond Joe” due to his appetite for outback diamond and gold deposits confirms the worst fears of Merlin Diamonds’ shareholders, who have already endured a seven-month trading ban on the company’s stock.

Joe Gutnick.

Court filings released to The Age and Sydney Morning Herald on Tuesday show ASIC is seeking an order to appoint Deloitte as liquidators of Merlin Diamonds, which had a market capitalisation of just $20 million when its stock was banned from trading last October.

ASIC has for months been probing how Merlin Diamonds has loaned $13 million of investor money to a private company, AXIS Consultants, which has long been associated with Mr Gutnick.

“The loans have been used to fund private companies associated with Joseph Gutnick and provide no discernible benefit to Merlin Diamonds,” ASIC said in a statement on Tuesday evening.

In one example cited by ASIC, it alleges Merlin Diamonds in October 2016 received $900,000 from a Mr Gutnick-linked company, Chabad Properties, for convertible notes and options issued to Chabad.

“The ultimate source of the $900,000 paid by Chabad, through a series of transactions involving related companies, was Merlin Diamonds. Mr Gutnick is a former director of Chabad,” ASIC’s media statement revealed.

Mr Gutnick, who resumed the chairmanship of Merlin Diamonds after emerging from a self-imposed bankruptcy last year, and his wife, Stera Gutnick, are also named in the ASIC’s court filing to wind up Merlin Diamonds. Mrs Gutnick is not a director of Merlin Diamonds and is not understood to be personally under investigation.

ASIC has asked the liquidators to examine and provide an opinion on whether Mr Gutnick and other past and present Merlin Diamonds directors and officers, have breached the Corporations Act.

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Merlin Diamonds, Not So Magical Now – ASIC Move to Liquidate Company – Follow the Money…


ASIC media releases are point-in-time statements. Please note the date of issue and use the internal search function on the site to check for other media releases on the same or related matters.

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Tuesday 14 May 2019

19-113MR ASIC moves to appoint provisional liquidator to Merlin Diamonds Ltd

ASIC has applied to the Federal Court of Australia to wind up ASX-listed public company Merlin Diamonds Limited (ACN 009 153 119) (Merlin Diamonds) and for the appointment of provisional liquidators to report to the court pending hearing of its application for final relief.

The application arises from ASIC’s concerns which include:

  • since 2012, Merlin Diamonds has advanced substantial funds to Axis Consultants Pty Ltd (Axis), a related management services company, without shareholder approval ($13,752,124 owing as at 30 June 2018) (Loans);
  • the Loans have been used to fund private companies associated with Mr Joseph Gutnick (a current and former director of Merlin Diamonds and Axis respectively) and provide no discernible benefit to Merlin Diamonds;
  • the terms of the Loans appear to be unreasonable, uncommercial and non-arm’s length. No security for the Loans has been provided by Axis or any third party and the Loans are being fully provisioned (impairment provision) each financial year;
  • the Merlin Diamonds auditors have been unable to obtain sufficient appropriate audit evidence to be satisfied that Axis is likely to be able to repay the Loans;
  • in October 2016 Merlin Diamonds received $900,000 from Chabad Properties Pty Ltd (Chabad) for convertible notes and options issued to Chabad. The ultimate source of the $900,000 paid by Chabad, through a series of transactions involving related companies, was Merlin Diamonds. Mr Gutnick is a former director of Chabad;
  • audited accounts of Merlin Diamonds for the half-year ended 31 December 2018 (due 18 March 2019) have not been lodged with ASIC, a contravention of s320 of the Corporations Act;
  • the financial position of Merlin Diamonds as at 30 June 2018 raises concerns over the company’s solvency;
  • there has been no company secretary of Merlin Diamonds since 8 January 2019, a contravention of s204A(2) of the Corporations Act; and 
  • corporate governance of Merlin Diamonds falls far short of the standard expected of an ASX-listed public company.

ASIC seeks from the Court:

  • the appointment of Mr Salvatore Algeri and Mr Timothy Norman, of Deloitte Financial Advisory Pty Ltd as joint and several provisional      liquidators of the company; and
  • orders requiring the provisional liquidators to provide a detailed report to the Court that sets out, among other things:
    • the way in which Merlin Diamonds has made the Loans;
    • the recoverability of the Loans from Axis;
    • the $900,000 transaction involving Chabad; and
    • the financial position of Merlin Diamonds
  • for the Court’s consideration at a later date, orders to wind up the company and appointing Mr Algeri and Mr Norman as liquidators.

ASIC’s application will be heard in the Federal Court of Australia at Melbourne on a date to be fixed.

ASIC’s investigation into the affairs of Merlin Diamonds is continuing.


Merlin Diamonds, a Melbourne-based company listed on ASX, engages in the exploration and development of diamond mining projects. Its flagship project is the Merlin diamond mine in the Northern Territory.

Merlin Diamond’s shares have been suspended from trading since 1 October 2018. Merlin Diamonds has 3.3 billion ordinary shares issued, and last traded at $0.006 per share – resulting in a market capitalisation of approximately $20 million.

Editor’s note:

The matter was listed for the first case management hearing on 4 June 2019 in the Federal Court, Melbourne.

Controversial Firing of Rabbi at Yeshivah College, Australia, and Parents Rally

Parents at Yeshivah Beth Rivkah Colleges are campaigning against the controversial sacking of a rabbi

Parents campaign against rabbi’s controversial school sacking

Parents at Yeshivah-Beth Rivkah Colleges say they have lost confidence in their school board following the controversial sacking of a popular rabbi.

Tension is growing at the Orthodox Jewish school, with almost 400 parents, students, alumni and community members signing a petition in protest over “massive staff changes” unveiled by principal Rabbi Yehoshua Smukler and the school board.

They are particularly upset about the recent sacking of Rabbi Pinchas Ash, a much-loved Yeshivah teacher who has worked for the organisation for 40 years.

Rabbi Ash has lodged an unfair dismissal claim in the Fair Work Commission.

“I would like to thank all the present students and past students, parents and friends for all the personal messages of goodwill that I have received,” he told The Age.

It is understood his dismissal relates to him accidentally missing breakfast and assembly duties.

To continue reading click here.

A Plea for the Extradition of Malka Leifer, Still Protected by Israel

United Torah Judaism leader Yaakov Litzman

‘Extradite Leifer’ pleads voter

THE ongoing saga surrounding attempts to extradite Malka Leifer has impacted on the Israeli election, for one Australian oleh at least.

Howard, who asked that his surname be withheld, said he could no longer bring himself to vote for the United Torah Judaism (UTJ) party because its leader Yaakov Litzman has been accused of falsifying psychiatric assessments to help the former Adass Israel principal evade extradition.

Litzman is Israel’s Deputy Health Minister. 

The handwritten note calling for Malka Leifer to be extradited.

Howard said he lived in Melbourne during the time that Leifer allegedly committed at least 74 acts of child sexual abuse. Attempts to extradite her have foundered amid claims she is unfit to stand to stand trial.

Referring to the party by its Hebrew shorthand, Gimmel, Howard told The AJN: “I voted for Gimmel in the 2013 and 2015 Knesset Elections. I decided not to vote for Gimmel this time as a result of the alleged conduct of Deputy Health Minister Litzman in falsifying Malka Leifer being mentally ill in order to prevent her to face the justice system of the State of Victoria.”

Instead, Howard cast what is called an informal ballot on which he penned a note, “Extradite Malka Leifer to Australia.”

Meanwhile, Israel’s ultra-Orthodox parties are desperate to avoid a Blue and White-led government, fearing that it would mean conscription for yeshivah students. 

They engaged in frantic last-minute campaigning, with one party even holding a huge election rally, despite normally rejecting such events as unbefitting religious leaders. 

There, one of the party’s leaders, Moshe Gafni, predicted doom if his party didn’t come out of the vote strong, telling the crowd of thousands that they are “in the middle of a war over Shabbat” and “a war for yeshivah students”, meaning to avoid their conscription. 

Now, the ultra-Orthodox parties look poised to hold on to their 13 Knesset seats – but only after the fight of a lifetime.

They struggled hard to avoid losing votes to right-wing parties. The unprecedented election rally brought together rabbis from rival camps who don’t normally talk. The event for the UTJ party, in Jerusalem, united people from Chassidic and non-Chassidic communities. 

To continue reading the article in its entirety click here.

Australia, Yeshivah Center – Child Sexual Abuse and Questions [Part II] – Are the Children Safe?

The Royal Commission into Institutional Responses to Child Sexual Abuse – Letter to Members – “Real and Present Danger”

Thank you to the source of the following letter, sent to LM on the 25th of March, 2019. We apologize for the formatting. The letter was apparently sent out to members of the Yeshivah Center. 

Letter to the Yeshivah Center Community, re: Royal Commission Investigation into Child Sexual Abuse – Part I

Hat Tip to our Source for the following:


To the Yeshivah Center Community – Australia

Dear Members of the Yeshivah Community,

My last public email was in June 2011.

In response to that email, and the assistance I provided to the police and the authorities in relation to incidents of child sexual abuse, including rape, at Yeshivah; my family and I have been subjected to bullying, intimidation and ostracism.

The purveyors of this conduct sent e-mails and used blog sites where they anonymously posted vile and abusive comments, as part of the demonization of victims, advocates and their families. This conduct was part of a wider cultural problem at Yeshivah, that manifested in a dangerous environment for children, as was so painfully and publicly exposed by the Royal Commission into Institutional Responses to Child Sexual Abuse.

The purveyors of this conduct acted under the mistaken and perhaps arrogant belief that their identities would never be discovered and exposed. They arguably demonstrated that they feared man, more than G-d, in stark contrast to their projected ‘religious’ identity and self-proclaimed status as ‘yiras shmoyim’ (G-d fearing Jews).

The Yeshivah leadership belatedly and unreservedly publicly pledged and affirmed including to the Royal Commission, that it had ‘zero’ tolerance for such behaviour and its perpetrators.

Sadly, those representations have proven false. Consequently, the integrity of the institution, and the robustness of the child safety policies has been undermined.

The specific identities of purveyors of this conduct is now known.

Recently, Chabad Institutions of Victoria was provided information relating to the identity of 18 people, whose activity has been exposed as a result of various successful legal actions.

These 18 people include:

  1.  at least 1 current member of the Boards of the ‘Yeshivah Centre’;
  2.  at least 2 current employees of the ‘Yeshivah Centre’;
  3.  at least 2 persons who hold a volunteer positions at the ‘Yeshivah Centre’; and
  4.  at least 1 person who is the child of one of the 3 “Head Shluchim” of Chabad in Victoria as determined by Merkos.

To date, Chabad Institutions of Victoria has failed to act on this information and uphold its public promises.

More to come…


Good Shabbos.