This article is from the Australian Property Journal archive
PROPERTY promoter Henry Kaye will no longer stand trial on a charge of dishonestly obtaining a financial advantage.
Kaye was due to stand trial in July charged with one count of dishonestly obtaining a financial advantage for another by deception. The case involved a $17.7 million credit facility provided by St George Bank to a developer of the Oasis apartments in St Kilda, Victoria.
The Oasis apartments were marketed by Oasis Investments Pty Ltd, a company owned by 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 Kaye.
Last Friday, the Australian Securities and Investments Commission announced the Commonwealth Director of Public Prosecutions has discontinued proceedings against Kaye in the Melbourne County Court.
The CDPP said in light of new evidence presented by a witness that was significantly different from the evidence given by the same witness at the committal proceedings, the CDPP had reassessed the prospects of conviction of Kaye and decided to discontinue proceedings.
The proceedings arose out of ASIC’s involvement with Kaye in relation to his wealth creation seminars and financing activities.
In 2003 and 2004, ASIC mounted extensive investor-oriented civil action against Kaye seeking compensation for investors he had misled. ASIC obtained undertakings from Kaye preventing him from conducting wealth creation seminars and requiring him to compensate investors.
ASIC’s proceedings culminated in September 2004, when the Federal Court declared Kaye was involved in misleading and deceptive conduct.
Kaye was a director of a number of companies within the Provident Group. The group used seminars as a marketing channel for its property development and financing activities.
ASIC commenced civil proceedings in March 2003 after it obtained evidence that companies associated with the Provident Group were using misleading information during these seminars.
As part of its investigation of Kaye’s seminars, evidence came to light in February 2004 that led ASIC to commence a separate investigation into the circumstances surrounding Kaye’s credit facility obtained from the St George Bank.
The bank provided the credit facility on the basis that sufficient unconditional contracts of sale for the apartments had been secured by Kaye. The vast majority of purchasers paid the 10% deposit by way of a GIO deposit bond.
Kaye in his negotiations with GIO provided a waiver letter that brought into question the validity of the deposit bonds.
Kaye had maintained his innocence through out the whole episode.
Australian Property Journal