THE head of urban renewal authority Places Victoria, Liberal Party stalwart Peter Clarke, faces a ban from corporate life over the failure of a $550 million retirement village group.
In court documents, the corporate regulator alleges Mr Clarke, along with former Howard government health minister Michael Wooldridge and other former directors of Australian Property Custodian Holdings, made improper use of their positions when approving a $33 million payment to managing director Bill Lewski.
APCH ran the Prime Retirement and Aged Care Property Trust, which collapsed in October 2010 after nervous lenders appointed receivers over its retirement villages.
The board allegedly approved a $33 million "listing fee" that Prime Trust paid to Mr Lewski after Prime Trust floated on the stock exchange in 2007.
In an originating motion filed last Tuesday, the Australian Securities and Investments Commission alleges Mr Clarke, Dr Wooldridge, Mr Lewski and two other directors each "made improper use of his position", "failed to act in the best interests of the members of the Prime Trust" and "failed to take all steps that a reasonable person would take" in his position.
ASIC has asked the Federal Court to ban all five from managing corporations and order them to pay a pecuniary penalty. It did not say how long the bans should run nor specify how much the men should pay.
Mr Clarke quit the Melbourne City Council last year after being appointed chairman of Places Victoria by Premier Ted Baillieu without going through a formal selection.
The authority replaces VicUrban and is responsible for major projects, including the 240 hectare new suburb at Fishermans Bend and a $300 million bid to revitalise the unpopular Docklands precinct.
Mr Clarke said he was not aware of the lawsuit until contacted by The Age.
"Once we see what they've got to say, we'll refer it to lawyers, but I'd certainly be denying I've got any responsibility for them," he said.
A spokeswoman for Planning Minister Matthew Guy said the government "will not be commenting on a matter that is now before the courts".
Mr Lewski's solicitor, Sam Bond, and Dr Wooldridge, who chaired the APCH board, did not return calls. The Age could not reach the other directors named by ASIC, real estate agent Mark Butler and former 7 Eleven franchising manager Kim Jaques.
A ban from corporate life would see Dr Wooldridge ejected from the boardrooms of ophthalmology group Vision Eye Institute, Australian Pharmaceutical Industries, anti-wind farm group the Waubra Foundation and the Royal Melbourne Tennis Club.
The Prime Trust Action Group, which claims to represent more than 70 per cent of unit-holders, welcomed ASIC's move but said more needed to be done.
"If ASIC are successful, it will provide a helping hand to other actions in terms of not having to re-establish facts," group principal Steve O'Reilly said. "It's a very useful first step, if nothing else it's quite positive."
The action group is also concerned about $60 million Mr Lewski reaped in 2008 when one of his companies sold rights to manage 12 Prime Trust retirement villages to Babcock & Brown.
Babcock & Brown's chief executive was Phil Green, the brother of Max Green, a former business partner of Mr Lewski's who was murdered in Cambodia in 1998 after allegedly defrauding more than $30 million from a trust fund.
"He [Mr Lewski] did not pay for those management rights, we understand," Mr O'Reilly said.
Frequently Asked Questions about this Article…
What is ASIC alleging in the case linked to Prime Retirement and Aged Care Property Trust?
The Australian Securities and Investments Commission (ASIC) alleges that five former directors and executives of Australian Property Custodian Holdings (APCH) — including Peter Clarke, Michael Wooldridge and Bill Lewski — made improper use of their positions, failed to act in the best interests of Prime Trust members, and did not take steps a reasonable person would take when they approved payments such as a $33 million listing fee.
Who are the individuals named by ASIC and what roles did they have?
ASIC named Peter Clarke (former head of Places Victoria), Michael Wooldridge (former APCH board chair and ex-health minister), Bill Lewski (managing director), and two other former APCH directors, real estate agent Mark Butler and former 7-Eleven franchising manager Kim Jaques. They were directors or executives involved with APCH and the Prime Trust operations.
What was the $33 million listing fee and why is it controversial?
The article says APCH’s board allegedly approved a $33 million ‘listing fee’ paid to managing director Bill Lewski after the Prime Trust floated on the stock exchange in 2007. ASIC contends that approving that payment was an improper use of position and not in the best interests of Prime Trust members.
What happened to the Prime Retirement and Aged Care Property Trust (Prime Trust)?
Prime Trust collapsed in October 2010 after lenders, concerned about the business, appointed receivers over its retirement villages. The collapse followed years of governance and payment disputes highlighted by ASIC’s action.
What penalties is ASIC seeking and has ASIC specified their length or amount?
ASIC has asked the Federal Court to ban all five individuals from managing corporations and to order them to pay a pecuniary penalty. ASIC did not specify how long the bans should run or the amount of the pecuniary penalties in the originating motion referenced in the article.
Could this action affect Peter Clarke’s role at Places Victoria or other public projects?
Peter Clarke, who was appointed chairman of Places Victoria, said he wasn’t aware of the lawsuit and would refer matters to lawyers once he sees the filings. The article notes Places Victoria oversees major projects such as Fishermans Bend and a bid to revitalise Docklands, but it does not state any direct action taken against his role at Places Victoria.
What does this mean for Prime Trust unit-holders and the Prime Trust Action Group?
The Prime Trust Action Group, which claims to represent more than 70% of unit-holders, welcomed ASIC’s move and said a successful ASIC action could help other legal efforts by avoiding the need to re-establish facts. The group also raised concerns about large payments to Mr Lewski, including about $60 million he received in 2008 when management rights were sold to Babcock & Brown.
Are there wider corporate consequences mentioned for the people named by ASIC?
Yes. The article notes that, if banned, Dr Michael Wooldridge could be ejected from boards including Vision Eye Institute, Australian Pharmaceutical Industries, the Waubra Foundation and the Royal Melbourne Tennis Club. ASIC’s requested bans could therefore have significant implications for any current directorships held by the individuals named.
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