Promoter of property investments Henry Kaye has been committed to stand trial before the Melbourne County Court on a charge of dishonestly obtaining financial advantage for another via deception.
The charges against Kaye were laid after an Australian Securities and Investments Commission (ASIC) investigation into his involvement with a property development called Oasis apartments.
ASIC alleges Oasis Investments, a company owned by Kaye, bought the majority of the Oasis apartments “off the plan”, with a view to selling them to members of the public.
In order to sell the apartments at a rapid pace, Kaye organised for GIO deposit bonds to be issued to buyers through Deposit Bonds Australia, which could not satisfy the qualifying requirements for this type of finance.
It is alleged Kaye then waived any rights he had to claim the bond money from purchasers.
These arrangements allowed a sufficient amount of contracts for sale to be completed, which enabled the property developer for the apartments to secure development finance to the amount of $17.7 million from St George Bank.
The corporate watchdog alleged that had the bank known Kaye had waived his rights to the GIO bonds, it would never have issued the loan to the Oasis apartment developer. At no stage was the developer aware that Kaye had waived his rights in relation to the deposit bonds.
Kaye pleaded not guilty to the charge but was ordered to surrender his passport, not to depart Australian shores without leave of the court and not to contact witnesses.
This action against Kaye is the latest in a series of incidents stemming back to 2003 where he has fallen foul of the regulator.
It follows initial proceedings brought against him for disseminating false, misleading, and deceptive information regarding mezzanine mortgage lending facilities via a series of seminars. Subsequent to this action, Kaye and his associates entered into enforceable undertakings with ASIC, which the regulator later alleged were breached.
In March 2004, ASIC applied to have a number of companies Kaye was associated with wound up.
