Prime Trust Action Group Meets with Federal Parliamentarians
On 22 March 2011, representatives of the Prime Trust Action Group travelled to Canberra to meet with Mr Paul Neville, MP, Member for Hinkler and Mr Slade Brockman, Chief of Staff for Senator Mathias Cormann.
A number of concerns were raised about the management of Prime Trust, including:
• the potential unitholder losses of more than $500 million (more than double the losses associated with the Westpoint disaster);
• the listing fee of $33 million paid to interests associated with Mr Bill Lewski;
• the alleged misappropriation of the village management rights which led to Mr Lewski selling those rights for a personal gain of $60 million;
• the externalization of the village management rights which led to the retirement village portfolio being written down by more than $100 million;
• the payment of distributions from unrealized capital gains;
• the use of additional borrowings and new subscriptions to finance distributions, which meant that the Trust had taken on the characteristics of a Ponzi scheme; and
• the restructuring of management agreements so that the Trust’s share of deferred management fees fell from 100% to 40%, with such change being applied retrospectively.
A number of cases were highlighted where unitholders have lost their homes or their life savings as a result of their investment in Prime Trust.
There was also some discussion about unitholders being accepted as contingent creditors and the delays caused by the administrator in responding to this issue were noted.
It was noted that large numbers of unitholders have already submitted written complaints about Prime Trust to both ASIC and their local Federal member. It was also noted that many members of both the House of Representatives and the Senate are now well aware of the issues surrounding Prime Trust and it was acknowledged that a thorough and detailed investigation into the very serious allegations raised by the Prime Trust Action Group should be pursued by the appropriate authorities.
It was noted that many Parliamentarians are willing to make representations on this matter to the Hon. Bill Shorten, Assistant Treasurer and Minister for Financial Services and Superannuation, and many have infact already done so.
Prime Trust Action Group
24 March 2011