Westpoint founder Norm Carey to sue ASIC after charges dropped

Westpoint founder Norm Carey says he will sue corporate watchdog ASIC, after charges against him in relation to the 2006 collapse of the property investment business were dropped.

The charges against Carey and former Westpoint chief financial officer Graeme Rundle were dropped, two weeks into a trial in Perth's district court.

ASIC had alleged that both had breached their duties as officers of Westpoint Management Limited and Westpoint Corporation Pty Ltd in relation to the purchase of the Warnbro Fair Shopping Centre and adjoining land.

Westpoint collapsed in January 2006 with investors having placed $388 million of funds in Westpoint related financial products.

“During the course of the trial, ASIC located a document relevant to the charges,” said ASIC.

“In accordance with ASIC’s procedural fairness obligations, ASIC immediately disclosed the document and copies were given to Mr Carey and Mr Rundle, and the court.

“Following an assessment of the document in the context of the prosecution’s case, the Commonwealth Director of Public Prosecutions today advised the District Court of Western Australia that the case should proceed no further and filed Notices of Discontinuance.”

Carey said he would seek millions of dollars in compensation over the failed prosecution, reported Fairfax Media.

He says his legal fees were around $500,000.

Carey said the evidence presented at the trial showed that he acted not only honestly, but that he had put the interest of investors above his own.

In December 2011, ASIC settled an action brought by Carey.

Carey had claimed unspecified damages from ASIC for alleged misfeasance in public office and negligence, arising from ASIC’s decisions in late 2005 to start winding-up proceedings against two Westpoint mezzanine finance companies.

In June 2011, a jury found Graeme Rundle guilty on two charges of making false or misleading statements to a financial institution in support of a $71 million credit facility application to fund a Westpoint building of the Scots Church project in York Street, Sydney.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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