UNDER investigation … Gold Coast businessman Craig Gore near his home on Ephraim Island. Picture: Tim Marsden Source: The Courier-Mail
THE corporate watchdog is investigating whether to ban embattled Gold Coast business tycoon Craig Gore as a company director.
As part of its probe, the Australian Securities & Investments Commission has provided funding to liquidators to generate supplementary reports into the conduct of Gore and his business partner, John Atkinson.
Corporate records show that 23 companies in Gore’s property and finance-related business empire have failed after falling into external administration since early last year. All are in liquidation and/or receivership, with many millions of dollars owed to creditors.
Gore, son of the late Sanctuary Cove developer Mike Gore, also faces another creditor’s attempt to have him declared personally bankrupt.
Bendigo and Adelaide Bank, which is chasing Gore in Melbourne’s Federal Magistrates Court over an alleged $104,037 debt, succeeded in bankrupting Atkinson in May over $86,697 owing.
Gore said he plans to defend the matter but he has yet to to submit any documents to court. The next hearing is scheduled for this Thursday.
Court records indicate it is the sixth attempt by various parties since August last year to bankrupt Gore, who previously spent seven years bankrupt in the 1990s.
Sydney liquidator Steven Kugel said he received $17,000 from ASIC to produce extra reports on each of the two men in their capacity as directors of failed entity Secured Capital & Finance Pty Ltd and their possible breaches of the Corporations Act. The investment firm collapsed in June last year owing creditors $2.58 million. In his report to creditors in May this year, Kugel expressed the stunning opinion that the company may have operated fraudulently.
“In the absence of books and records to adequately record and explain transactions of the company, I can only conclude that the operation of SC&F was something akin to a Ponzi scheme,” Kugel wrote.
Kugel stated in the report that, between 2001 and 2004, investor contributions were used to make interest payments to other investors, pay directors’ credit card bills and forward money to other companies owned by Gore and Atkinson.
Kugel also said in his report that it appeared, from his review of company records, that SC&F had not operated any real trading business, owned any assets, managed investments, employed staff or correctly maintained books.
Kugel determined that SC&F clients relied on advice they received from financial services firm Wright Patton Shakespeare, which was then also owned by Gore and Atkinson. “I am doubtful as to whether most investors in SC&F understood that,” he wrote. “Despite the name … SC&F did not offer a secured investment where investors’ capital was secured by way of property or some other tangible asset”.
Gore denounced allegations of a Ponzi scheme as “absolutely ludicrous and ridiculous” and said more than $50 million flowed through the company.
His lawyer demanded in June that Kugel “retract and apologies (sic) for the defamatory publications made by you”. Kugel’s counsel, Peter Harkin, responded that the report has “absolute privilege”.
As of last week, Gore had taken no legal action against Kugel, who has strongly defended his analysis of the firm.
“I do stand by what I said in that report,” he said.
Meanwhile, it will take years for SC&F investors to get all their money back.
Gore vowed that investors would get back 100 cents on the dollar under a settlement deal almost all of them agreed to this month.
Investors have already received 10 cents on the dollar based on interest payments since mid-2009.
A third party will pay out another 60 cents over four years.
The remaining 30 cents would be recovered over two years if tax losses can be utilised.
Gore’s corporate financial problems became apparent in February last year, when receivers and managers were appointed to three entities in his Atkinson Gore Group over a $145 million loan default.
Since then, Gore and his entities have faced a slew of lawsuits seeking money allegedly owed. The Australian
Taxation Office secured orders to recover $1.1 million from Gore personally over unpaid tax from seven companies and wound up another six of his entities which owed more than $1.6 million.
The NSW Supreme Court ruled in June that Gore pay $705,093 and costs to Permanent Custodians Ltd stemming from a 2004 loan. Gore declined to comment, describing the issue as a matter between himself and Permanent Custodians.
ASIC officials have refused to discuss their investigations of Gore and Atkinson.
But the agency has moved in the past against company directors who preside over numerous corporate failures.
Just last month, ASIC disqualified former property spruiker Henry Kaye from managing corporations for five years based on his involvement in 26 failed companies.
Article by Anthony Marx Courier Mail 16-8-10
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