This article is from the Australian Property Journal archive
Property education king Henry Kaye has been 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.
Kaye 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.
A mention date has been set down for the Melbourne County Court for 9am on 28 May.
The Oasis apartments, located in St Kilda, 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.
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, 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.
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 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 Kaye had waived his rights in relation to the deposit bonds.
ASIC alleges that if St George Bank had been aware of 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.
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.
Australian Property Journal
