Places Victoria former boss 'hazy' on dealings
URBAN renewal authority head Peter Clarke has admitted to doing nothing to stop the chief executive of property group Prime Trust from receiving management contracts worth $60 million.
URBAN renewal authority head Peter Clarke has admitted to doing nothing to stop the chief executive of property group Prime Trust from receiving management contracts worth $60 million.Chief executive Bill Lewski received the contracts for free and later sold them to the benefit of his personal companies.Mr Clarke was a director of the company that ran Prime Trust, Australian Property Custodian Holdings, between 2006 and 2010, when the group's collapse put in jeopardy $550 million of investors' money.He was forced to stand aside as chairman of urban renewal authority Places Victoria in late August after it was revealed the corporate watchdog launched legal action to have him and other APCH directors banned from running companies over the collapse.Giving evidence in a separate proceeding yesterday, a public examination before Supreme Court Associate Justice Rodney Randall, Mr Clarke said after he joined the board the trust continued a practice of gifting the right to manage Prime Trust villages to Mr Lewski. "That was the pattern we followed," Mr Clarke told the court."I didn't seek to change it."Mr Lewski sold the rights over 12 villages to investment bank Babcock & Brown for $60 million in September 2007 an event Mr Clarke told the court he did not recall discussing with anyone."I became aware the rights had a value, I wasn't aware of the quantum," he said.Mr Clarke admitted Prime Trust relied on the same law firm Mr Lewski used, Madgwicks.He said he remembered dealing with Madgwicks partners Lorna Gelbert, a Places Victoria board member who gave evidence on Thursday, and Rick Goldberg. He said he did not recall the trust ever getting independent advice."There may well have been some advantage in doing that," he said.Mr Clarke repeatedly told the court he did not recall events, saying his memory was "hazy".Asked by Jonathan Moore, counsel for APCH receiver KordaMentha, whether he had a medical problem with his memory, he said: "No."Mr Clarke was taken to property valuations conducted by real estate agents CBRE that showed the existence of the management fees slashed the value of Prime Trust's retirement villages by up to 60 per cent."I have no recall of that at all," he told the court.Separately, Mr Clarke and other directors of APCH, including chairman Michael Wooldridge, the brother of Minister for Community Services Mary Wooldridge, this week filed defences against the disqualification case brought against them by the Australian Securities and Investments Commission in the Federal Court.Mr Clarke, Dr Wooldridge, Mr Lewski, Mark Butler and Kim Jaques deny acting against the interests of unitholders by approving a $33 million fee paid to Mr Lewski after the fund listed on the stock exchange in 2007.Mr Clarke said that if paying the fee had hurt unitholders, he "shared in that adverse effect by reason of his own (albeit minor) interest in the Prime Trust".
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free