The Federal Court has disqualified Queensland director David Paul Hodgson from managing corporations for five years and permanently restrained him from providing financial services without an Australian Financial Services licence, following action by the corporate regulator against him and Paladin Group entities MacroLend Pty Ltd and Great Southland Limited, of which he is the sole director.
The Court found Mr Hodgson, MacroLend and Great Southland each carried on an unlicensed financial services business between 2015 and 2023. MacroLend and Great Southland raised around $109 million from investors over that period.
It also found Mr Hodgson and MacroLend engaged in very serious misleading or deceptive conduct in material provided to investors for investments in another Paladin Group company, Kradle Software Pty Ltd. Mr Hodgson and MacroLend claimed Kradle Software held intangible assets of $1.02 billion when the company’s balance sheet recorded intangible assets of only $11,180. The Court found Mr Hodgson’s valuation of $1.02 billion was ‘entirely fanciful’.
The Court further found Mr Hodgson and MacroLend misled investors by claiming MacroLend would use substantially all funds raised to grow Kradle Software and that the Kradle product would achieve a public listing on an overseas exchange.
Great Southland, a Belize-registered entity, was found to have operated unlawfully in Australia while unregistered for more than six years.
ASIC Deputy Chair Sarah Court said, ‘This type of misconduct undermines trust and confidence in Australia’s financial services.
‘Firms dealing in financial products have an obligation to be licensed which ensures customers are afforded key legal protections provided by an Australian financial services licence.
‘ASIC took this action as it was concerned about the misrepresentations made by Mr Hodgson and MacroLend, which included making misleading or deceptive claims about investing in Kradle Software.’
Mr Hodgson, MacroLend and Great Southland were ordered to pay ASIC’s costs.
MacroLend and Great Southland are part of the Paladin Group. A sub‑group, the Corearth Group, includes Corearth Holdings Pty Ltd and Kradle Software, with Corearth Holdings owning all shares in Kradle Software. Mr Hodgson is also a director of Corearth Holdings and Kradle Software.
ASIC commenced Federal Court proceedings against Mr Hodgson, MacroLend and Great Southland in February 2024. Mr Hodgson was previously banned from providing financial services for two years in July 2015 due to his involvement with Exalt Global Funds, which made false statements in investment disclosures.
