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Collapsed property spruiker’s missing millions

Collapsed property spruiker’s missing millions

by Nick Bendel 0 comments

An administrator’s report into the complex Charterhill Group collapse has raised questions about millions of dollars of missing money and insolvent trading.

At least four related entities of Adelaide financial services firm Charterhill Group entered insolvency in January.

One of the entities was Lending Solutions International, whose services included mortgage broking, and which collapsed with unsecured debts of $9.6 million, according to liquidator Heard Phillips.

About $5 million of that money was owed to Nova Real Estate, another Charterhill company.

Heard Phillips is also acting as Nova’s administrator. A creditors report has estimated that Nova has net liabilities of $7.2 million to $7.9 million.

According to Heard Phillips, Nova was “likely to be insolvent from at least July 2013”.

Heard Phillips also said that Charterhill’s sole director, George Nowak, embarked on a restructuring plan in May 2013 to secure fresh funding.

According to Heard Phillips, two related entities – Financial Wellness and EJ Property Developments – were sold by Polvere Nominees, a company controlled by Mr Nowak’s wife, to a public company called Australian CGI.

“The acquisition was completed on 7 June 2013 for $21 million,” Heard Phillips said.

“By the end of 2013, the Charterhill Group of companies was experiencing severe cash-flow problems and had insufficient working capital to implement a turnaround strategy, resulting in the collapse of numerous entities of the Charterhill Group of companies.”

Heard Phillips said Nova’s solvency was “entirely dependent” on collecting the funds it had advanced to Lending Solutions – and that Lending Solutions’ solvency was in turn reliant on collecting the loans it had advanced to four other Charterhill entities.

Mr Nowak told clients in a letter that the reason for Charterhill’s collapse was its diversification strategy.

Nova creditors are meeting today to decide the company’s fate. Heard Phillips has advised that creditors vote to liquidate Nova.

 

Collapsed property spruiker’s missing millions
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