Monday, September 29, 2008

Money, money, money and greed

from w
Nicely timed story just as in the USA stuff happens. Perhaps lucky for us we don't have any money to worry about!

from the Age newspaper today:
Chartwell goes into liquidation, owing $80m

Collapsed stockbroking firm Chartwell Enterprises went into liquidation today, owing investors a reported $80 million. About 75 investors in the failed Geelong-based company attended the second creditors meeting and voted in favour of the administrators' recommendation to liquidate the company. Chartwell, run by flamboyant Geelong businessmen Graeme Hoy and Ian Rau, was placed in administration on April 22 and a report by administrators sent to creditors last week.

Administrator Bruno Secatore said he had been able to uncover loan accounts taken out by the directors and various monies paid to parties. ''We don't know if they are tied up with the directors or with the business, that's part of our investigation process,'' he said. He said administrators were waiting on documentation from the banks to pursue the loans, which exceed $3 million. The loans were taken out over the past three years, Mr Secatore said.

''That's just the start of it,'' he said. ''Subject to when we get the source documentation from the bank we'll be able to trace whether there's been other monies go out to the directors.''

Mr Secatore said until he obtained the documentation he was unsure whether investors could expect to get any of their money back.

''At this point in time there is nothing there,'' he said.

Mr Secatore said administrators would take legal action if necessary to recover the funds.
''We'll see if they can pay.

''If they can't, we take the relevant action. ''If we try and obviously pursue the legal action right through to bankruptcy that's what we'd be looking at.''

Mr Secatore said a further report to investors would be distributed in three months' time.

Administrators' investigations would now focus on determining where the money came in, went out and the conduct of directors and others involved in the management or promotion of the company, he said.

Mr Secatore said he had been in touch personally with Mr Hoy but he still had not spoken to Mr Rau, except through solicitors.
Creditors were told at the first meeting on May 5 they were owed $52 million, but the recent report to creditors reportedly says that figure is now $80 million.

The company had not paid tax or been audited for five years.

Although $14 million came into the company in the last two years, Chartwell made no investments in that time.

Administrators are investigating claims the money was being used to pay the interest payments of other investors, as well as funding Mr Hoy's and Mr Rau's lavish lifestyles.

Chartwell recruited its investors by word of mouth, with some pooling their money into syndicates, with the syndicate head or team leader earning returns of up to 70% for bringing in fresh blood.

Average investors were offered returns of up to 20% and some people had put in up to $5 million, most of which had been borrowed against their homes.

Mr Hoy's Rolls Royce and $6 million yacht have been claimed by the administrators of another of his companies, Black Swan, and those proceeds will not go to the Chartwell creditors.


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