Monday 19 March 2007 lawfuel – Australia Law – Melbourne man, Mr Henry Kaye, was today committed to stand trial before the Melbourne County Court on a charge of dishonestly obtaining a financial advantage for another by deception following an investigation by the Australian Securities and Investments Commission (ASIC). Mr Kaye, of Elwood, Victoria, pleaded not guilty in the Melbourne Magistrates Court following allegations by ASIC that he obtained for the developer of a property known as the Oasis apartments, a credit facility of $17,705,000, from St George Bank, by means of deception, to be used for the development of those apartments.
The Oasis apartments, located in St Kilda, were marketed by Oasis Investments Pty Ltd, a company owned by Mr Kaye, which bought the majority of the apartments ‘off the plan’ from the developer. Oasis on-sold the apartments to individuals, many of whom had attended seminars conducted by Mr Kaye. ASIC alleges, however, that due to the urgency in securing these sales, and the limited capacity of the purchasers to raise deposits for the purchases, Mr Kaye entered an arrangement with Deposit Bonds Australia whereby GIO deposit bonds would be issued to purchasers even though they may not have been eligible according to normal criteria. Mr Kaye then undertook to waive any rights he may have had against GIO for the payment of deposit money pursuant to the bonds. After obtaining the requisite number of contracts for the sale of apartments by this process, ASIC alleges Mr Kaye advised the developer that sufficient unconditional contracts of sale for the apartments had been secured to enable the developer to seek development finance from the St George Bank.
The finance was subsequently provided although neither the developer or St George Bank were aware Mr Kaye had waived his rights in relation to the deposit bonds. ASIC alleges that if St George Bank had been aware of Mr Kaye’s waiver letter to GIO, it would not have provided the $17,705,000 credit facility until the validity of the deposits had been resolved. Mr Kaye was ordered to surrender his passport, not depart Australia without the leave of the court, and not to contact witnesses without the approval of the informant.
A mention date in the Melbourne County Court of 9am on 28 May, 2007, was set. The Commonwealth Director of Public Prosecutions prosecuted the matter. For further information contact: Allen Turton Deputy Executive Director, Enforcement Telephone: 02 9911 2338 Mobile: 0411 549 236 Emma Forehan ASIC Media Unit Telephone: 03 9280 3354 Mobile: 0409 702 310