The Australian Securities and Investments Commission (ASIC) had alleged former federal health minister Michael Wooldridge and other board members breached their duties by approving changes to the trust’s Constitution, allowing a $33 million fee to be paid out of trust funds to Prime’s founder, Bill Lewski, after the trust was listed in 2007.
Around 9,700 ‘mum and dad’ investors put more than $500 million into Prime Trust before the Global Financial Crisis (GFC) but lost their money when the company fell into administration three years later.
ASIC commissioner John Price said the case highlights the need for people in business to recognise they are custodians of other people’s money. “They need to exercise reasonable care and diligence, not improperly use their position, comply with the law and act in the interests of investors,” he told The Australian Financial Review.
As we reported here, the corporate watchdog had lodged a special leave to appeal application back in December 2017 – just a month after the Federal Court in Melbourne ruled against ASIC’s disqualification of the directors of the Prime Retirement and Aged Care Property Trust.
The High Court has now sent the case back to the Federal Court to re-determine the penalties and disqualification periods for four of the five directors.
Under the original corporate bans and fines, Mr Lewski was disqualified from corporate management for 15 years and fined $230,000, while Dr Wooldridge had been disqualified for two years and three months and hit with a $20,000 fine.
The saga continues, no doubt with receivers earning fees of $900 per hour.