THE founder of failed retirement village group Prime Trust, Bill Lewski, gifted $60 million reaped from a controversial deal with Babcock and Brown to his sons, a court has heard.
However, Mr Lewski admitted that the management rights at the heart of the $60 million deal were partly based on temporary oral agreements that could have been terminated by the board of Australian Property Custodian Holdings, which ran the trust, at any time.
Mr Lewski was both chief executive of APCH and the holder of the management rights though his company Retirement Guide when he oversaw their formalisation into 25-year contracts shortly before APCH floated Prime Trust.
Retirement Guide received the rights for free after the APCH "directors discussed the matter" and Mr Lewski then sold them for a personal profit of $60 million.
The temporary oral agreements came to light on Tuesday during a public examination of people involved in the collapse of Prime Trust in October 2010, which put at risk $550 million in investors funds.
Bank-appointed receivers KordaMentha are investigating whether the $60 million can be recovered.
"Did you tell your fellow directors that . . . the oral agreements, they could be terminated or changed by the board if they wanted to?" Mr Lewski was asked by counsel for KordaMentha Jonathan Moore.
"I did not tell them. I thought that it would have been obvious and apparent to them," Mr Lewski replied.
He agreed that the full $60 million from the sale was distributed through a trustee to his wife, who then gifted the entire amount and any other assets to investment trusts in the name of the Lewski children.
Both these trusts are managed by Mr Lewski.
His wife, Roslyn Lewski, was also questioned because she was listed as the director of the company which ultimately received the funds. Mrs Lewski told the court her husband managed her financial affairs and she would sign documents when asked without looking at the detail.