This article is from the Australian Property Journal archive
THREE former directors of failed property group Australian Capital Reserve, which collapsed in 2007 owing over $600 million, are facing criminal charges.
Samuel Pogson, Murray Lapham and Steven Martin have been charged under the NSW Crimes Act with one count each of making a false statement to obtain a financial advantage for ACR.
The trio has appeared in the Downing Centre Local Court on charges brought by the Australian Securities Investments Commission.
ASIC alleges that the directors concurred in the making of a statement in ACR’s Prospectus 6 lodged on 7 April 2004, which contained the financial statements of ACR’s parent company, Castle Investment Company Limited and controlled entities as at 31 December 2003.
ASIC alleges that the CIC stated profit before income tax as at 31 December 2003 of $7,409,483 took into account sales revenue from transactions that had not properly occurred before 31 December 2003.
Estate Property Group Limited (formerly CIC) and its 21 subsidiaries, including ACR, went into voluntary administration on 28 May 2007. ACR was the fund-raising arm of the group and lent $332 million of noteholders’ funds to 13 of EPG’s property owning subsidiaries.
On 17 September 2007, the Administrator of EPG entered into a Deed of Company Arrangement with EPG and ACR to return to ACR unsecured noteholders approximately 59 cents in the dollar. As at 27 November 2009, creditors had received a total of 47 cents per dollar.
Further distributions are forecast until July 2013.
ASIC has also charged Pogson under s1308(2) of the Corporations Act with one count of making a false or misleading statement in a form lodged with ASIC.
ASIC alleges that in ACR’s Prospectus 6, Pogson signed a Directors Declaration that the financial statements of CIC gave ‘a true and fair view of the financial position as at 31 December 2003 and of the performance for the half- year ended on that date of the Company and Economic Entity’, when he knew that the stated profit before income tax took into account sales revenues that were not transactions that had properly occurred before31 December 2003.
The matter will return to the Downing Centre Local Court on June 22.
Australian Property Journal
