This article is from the Australian Property Journal archive
TWELVE years after the collapse of Prime Retirement and Aged Care Property Trust (Prime Trust) which saw $550 million of investors’ money disappear, and multiple court cases, civil claims and bureaucratic confusion follow, the corporate watchdog has cancelled the financial services licence of the responsible entity, Bill Lewski’s Australian Property Custodian Holdings Ltd (APCHL).
The Australian Investment and Securities Commission (ASIC) yesterday said it had cancelled the licence because APCHL is in liquidation, following enquiries it made about APCHL’s progress in winding up two managed investment schemes, and liquidators PKF Melbourne appointed to APCHL in November 2011 advising that APCHL no longer required the licence.
The licence will continue until mid-August next year “only to allow APCHL to provide the financial services necessary for the winding up of the schemes”.
Prime Retirement and Aged Care Property Trust was a managed investment scheme that owned retirement villages in Queensland, NSW and Victoria, that collapsed in 2010 owing $550 million to 9,700 shareholders.
However, entities associated with founder Bill Lewski made about $93 million through transactions related to Prime Trust. That included Lewski and others making a $33 million payment to ACHPL as a fee for listing on the ASX, and $60 million paid to Lewski after one of his companies sold management rights over Prime Trust retirement villages. Liquidators claimed he did not own the rights.
Years of bitter legal proceedings followed. In October 2019, the full federal court upheld a previous ruling that banned Lewski from running a company for 15 years and fined him $230,000. Also involved was former Howard government Minister for Health and Aged Care Michael Wooldridge, who received a two-year ban and a $20,000 fine.
Proceedings against Lewski for the payments settled in 2018 with Lewski making no admission of wrongdoing.
Investors have continued to seek $200 million in compensation from ASIC, but have been caught in bureaucratic loopholes. ASIC told investors its authorisation to make decisions on compensating people for bad decisions by regulators expired in 2015 and referred them to then-Federal Treasurer Josh Frydenberg. However, Treasury officials told investors that Frydenberg was unable to make a decision as it would interfere with ASIC’s independence.
Prime Trust investors have blamed ASIC for making a mistake in granting a financial services licence to APCHL. In 2004, ASIC took legal action against some of Lewski’s companies following concerns that they were running a managed investment scheme without appropriate registration and their dealings with investors, while an unregistered property scheme associated with Lewski was wound up in 2007.
