Primelife executives take fight to court
SENIOR executives of Lend Lease Primelife are fighting moves to publicly examine them over a controversial $60 million sale of management rights of the collapsed Prime Retirement & Aged Care Property Trust.
SENIOR executives of Lend Lease Primelife are fighting moves to publicly examine them over a controversial $60 million sale of management rights of the collapsed Prime Retirement & Aged Care Property Trust.The executives, led by the chief executive, Paul Walsh, have claimed in documents lodged with the Federal Court in Sydney that the Australian Securities and Investment Commission improperly exercised its power by authorising the receiver Korda Mentha to summons them to be examined about the affairs of Australian Property Custodian Holdings Limited, the responsible entity for the trust.The $400 million retirement village group, with 12 properties in Queensland, NSW and Victoria, went into administration late last year. Korda Mentha, a receiver appointed to some of the villages by Capital Finance Australia and NAB - which are owed $158 million - has already conducted examinations in Melbourne over the management rights sale.Unitholders - of whom there are more than 9000 - and are represented by the Prime Trust Action Group, have also been agitating about the propriety of the management rights sale.The Melbourne court examinations have heard that a company of founder Bill Lewski, called Retirement Guide, was granted management rights for no cost. It later sold those rights to Babcock & Brown Communities, now owned by Lend Lease Primelife, for $60 million.The administrator of the trust, Stirling Horne from lawler draper dillon, told BusinessDay the three receivers who had been appointed by the secured creditors believed the management rights were integral to any sale. "The receivers believe if they are are to sell the villages without the management rights there might be significant loss," he said.For the unitholders of the once ASX-listed trust, the management rights sale was but one action that was detrimental to their interests, Mr Horne said.In his second report to creditors, to be released today, Mr Horne said he would lodge a legal claim by the end of the month against directors challenging another controversial fee - this time a $33 million listing fee paid by unitholders when the trust listed on the stock exchange. The fee was paid to the responsible entity, which was owned by Mr Lewski.The administrator's investigation has identified other issues of detriment to unitholders. This includes the alleged improper payment of distributions, unauthorised investments to third parties, and alleged misleading and deceptive conduct as a result of defective disclosure. Mr Horne issued letters of demand to 10 current and former directors of APCH, seeking compensation for alleged breaches of the Corporations Act and the trust's own constitution. The directors include Mr Lewski and the former federal Liberal health minister, Dr Michael Wooldridge.In a note on its website, ASIC says it is making inquiries into the conduct of APCH, about its operation and the current circumstances of the fund."ASIC is liaising with the administrators of APCH and is considering what further action is required," the statement says.