Prime Trust Action Group (“PTAG”) Response to Media Statement by Mr Bill Lewski
On 19 March 2013, SBA Law (solicitors, acting for Mr Bill Lewski) purported to issue the attached Media Statement on a website that appears to have been established to allow Mr Lewski to respond to various allegations relating to Prime Trust. Given that the Media Statement it is not on SBA Law letterhead, there is no author identified and no contact details provided, one has to question the motives behind the publication and the authenticity of the Media Statement.
On the assumption that the Media Statement is valid, PTAG wishes to make the following observations:
PTAG is appalled to note that, on 22 March 2013, SBA Law issued the attached letter to Mr Don Steel, which appears to contain threats to pursue legal action against Mr Steel. Again, this letter does not appear on the letterhead of SBA Law and their authorisation of its publication in this manner has to be questioned. PTAG considers this letter, addressed as it is to an 82 year old retiree who has lost a substantial part of his life savings from the Prime Trust collapse, to be misguided and remains confident that the full circumstances leading to the collapse of the Trust will ultimately be revealed for all to see.
PTAG also understands that Mr Lewski was provided the opportunity to appear on camera and discuss issues related to Prime Trust but declined such opportunities.
PTAG understands that SBA Law has also recently sent letters to the ABC, Channel 9 and Mr Stirling Horne (as Liquidator of the Prime Trust)
Prime Trust Action Group
23 March 2013
1&2. It has always been, and continues to be, PTAG’s contention that the fundamental issue concerning the listing fee is whether APCH was entitled to unilaterally amend the Constitution and that the introduction of the listing fee, without approval from investors, represented a serious breach of several sections of the Corporations Act and a violation of the Trust’s Constitution. This view has received broad acceptance from various parties and has directly led to legal proceedings being commenced in the Federal Court by ASIC and similar proceedings being commenced in the Supreme Court by the Receivers.
3. PTAG notes that the Financial Ombudsman Service (“FOS”) recently issued two Determinations finding that the Trust’s Product Disclosure Statements issued on 30 August 2005 (“2005 PDS”) and 26 June 2007 (“2007 PDS”) were misleading and deceptive and has awarded compensation to investors accordingly. The recent FOS Determinations relate to complaints lodged by investors prior to the Trust’s collapse in November 2010. PTAG suggests that, based on the information presented in the Media Statement, SBA Law appears to be unaware of these FOS Determinations.
In adjudicating on the Prime Trust disputes, the Ombudsman stated as follows:
4. PTAG contends that the comments attributed to Mr D’Aloisio several years ago are irrelevant to the current debate. PTAG’s view is that ASIC’s current legal action against several of the former APCH directors seeking to disqualify them from holding positions as company directors is the issue that should be occupying Mr. Lewski and his legal advisers.
5. PTAG remains firmly of the view that the seeds to the collapse of Prime Trust were planted during the period 2006 to 2008, a period in which the majority of the contentious transactions occurred. For example, prior to Mr Lewski’s sale of APCH to Kidder Communities in July 2008:
PTAG also notes that Mr Lewski resigned as APCH Director on 27 June 2008, and that the quarter ending 30 June 2008 was the last quarter in which the Trust paid a distribution in line with its forecasts. PTAG further notes that:
PTAG also refers to the view expressed by Mr Stirling Horne, in the recent 4Corners program, that the Trust would have survived to this day but for the $100 million received by entities associated with Mr Lewski in relation to the listing fee and management rights.
6. PTAG continues to contend that the restructure and sale of the management rights by Retirement Guide Pty Ltd (“RG”, a Lewski entity) were improper transactions and believes that the full circumstances of these dealings will be revealed in due course. Responses made by Mr Lewski at the Public Examinations in the Supreme Court confirmed that RG received the management rights for no consideration and then on-sold these rights for a gain of $60 million. Further, Mr Stirling Horne and Mr Petr Vrsecky, in their Liquidators’ Report dated 22 February 2013, advised that letters of demand in relation to the management rights were issued in March 2012 to several parties including Mr Lewski, the RG group of entities and entities associated with Lend Lease Primelife (the current manager of the Trust’s retirement villages). In the Liquidators’ Report, it is also clearly stated that one of the current issues is to determine which party (Receivers or Liquidators) will pursue a claim in respect of the management rights issues.
7. PTAG believes that any post-listing purchases of units by entities associated by Mr Lewski, especially any relatively minor purchases, are irrelevant to the fundamental issues surrounding the propriety or otherwise of the listing fee, the restructure and sale of the management rights and various other issues as previously identified by PTAG as recorded on our website.
8. PTAG is not in a position to comment on Mr Lewski’s proposal but note that there appears to have been no support for the proposal from the Receivers appointed by the secured creditors.
“The Panel is satisfied that the Applicants were led into error by the misleading omissions and representations in the 2005 PDS in making their initial investment…”
“The Panel is further satisfied that the Applicants were similarly led into error by the 2007 PDS and SPDS, which did not correct the previous misleading representations, in making their additional investment …”
the Trust recorded negative cash earnings for several financial years;
the listing fee ($33 million) was unilaterally introduced without approval from investors and subsequently deducted from the Trust; and
the management rights were transferred to entities related to Mr Lewski for no consideration, triggering a substantial reduction in the value of the Trust’s retirement villages.
the distribution for the quarter commencing 1 July 2008 (only four days after Mr Lewski’s resignation) was reduced by 50%; and
there was NO distribution for the quarter commencing on 1 October 2008; and
there have been NO distributions since 1 October 2008