THE failed property developer Ualan Property Holdings took with it more than $20 million of superannuation money, but not before its principals had allegedly "loaded up the books" and charged the super funds administered by Trio Capital "outrageous" asset management fees.
For a second day, Michael Anderson, a director of the Silverhall asset management and property group - which was rebranded as Ualan - was questioned during public examinations brought by the new responsible entity for the super funds.
Silverhall is jointly owned by Cameron Anderson, his unrelated business partner Michael Anderson, and minority stakeholder Mark Weller. Cameron Anderson was one of the three founding directors of Trio Capital, and Silverhall was appointed initial manager of the property investments of Astarra Wholesale Portfolio Service.
Mr Robert Beech-Jones SC, for the super funds, questioned Mr Anderson about new and revised fees added to management agreements during 2008. The termination fees alone totalled $12 million, he said.
He detailed a project at Warners Bay, with a book value of $7.16 million, at the most. If Silverhall was terminated, Astarra/Trio was up for fees of $5 million, he said. Mr Anderson replied the fee reflected what the final development would be worth, about $70 million.
"This was to crystallise a decision to load up companies with huge fees in the event that their services were terminated," Mr Beech-Jones said.
"That's incorrect," replied Mr Anderson.
"You wanted to make them so burdened with fees and charges to your companies it would make it very difficult for Astarra [Trio] to take them out."
The hearing has heard that a Silverhall building company, CPI Property Investment Pty Ltd, redeemed loans from existing mezzanine finance investors, replacing it with superannuation funds loaned through Silverhall Residential Property Holdings.
Mr Anderson said the funds were earning 3 per cent in the bank, and needed to go into projects to generate the 12.5 per cent interest it would pay to investors. He rejected that his parents, who had been original investors, had been given priority treatment in payout out the loans. He agreed that some debt to SRPH had been reduced to zero because of an offset against fees.
The examinations continue.