An industry-first project to launch a collapsible container is set to fold after the investment scheme coordinating its fundraising was found to be illegal.

McNally Australia Pty Ltd, which promoted a loan scheme to raise funds for Foltainer International Ltd between February 2001 and January this year, has agreed to repay AUD722,000 (USD380,638) to 59 investors by October 1 after an investigation by the Australian Securities & Investments Commission (ASIC), Australia's corporate watchdog.

The foltainer is a container that can be collapsed to one-third of its size in less than one minute by two men and a forklift. Foltainer International director Geoff Antcliffe told Forkliftaction.com News last year that the foltainer offered great cost savings, because three empty foltainers could be stacked on a truck instead of one.

ASIC said Foltainer chairman Robert Walsh and McNally Australia directors Peter McNally and Richard Ashton were operating an unregistered managed investment scheme and providing investment advice without the licences required under Australian laws.

Investors were told their money would be used to develop foltainer and other inventions, and that they would receive interest until they requested repayment. Last month Messrs Ashton, McNally and Walsh offered an enforceable undertaking to ASIC that the investors would be repaid after acknowledging the scheme was illegal.

ASIC enforcement director Allen Turton said the directors had also agreed not to offer investment products or securities advice in contravention of the law again.

"Companies which raise funds from the public must ensure their activities comply with the Corporations Act - and investors should obtain independent advice before making an investment decision," he said.

McNally Australia did not return Forkliftaction.com News's calls. Mr Walsh could not be reached.