03 August 2012

Perpetual Trust: Trustees Executors v. Perpetual Trust


Pyne Gould Corporation is winding down its public borrowing through Perpetual Trustee after getting its hand smacked following allegations that funds were being siphoned off to further the private interests of Pyne Gould’s majority owner, George Kerr.
In July 2012, the High Court appointed two individuals from accounting firm WHK to the board of Perpetual Trust as minders to oversee promised repayments by interests associated with George Kerr.
This followed evidence that Perpetual Trust funds had been used to refinance the Torchlight fund, another investment vehicle controlled by Kerr.  Some $28.6 million had been siphoned off to Torchlight.  It was to later come out in court that a Mr Tinkler, also a senior executive at Pyne Gould, had received $3.3 million from Perpetual; supposedly a loan but there was no written application for the loan and no security had been given for the advance.
Any continued need for observers on the Perpetual board was reviewed by the High Court in August 2012. 
The court was told the advances both to Torchlight and Mr Tinkler had been repaid.  Further evidence was given that the public arms of Perpetual Trust’s business were to be wound up.
Perpetual’s Cash Management Fund is to stop making any further loans and to stop borrowing from the public.  It is intended that existing public investors will be paid on maturity from new funds borrowed by Perpetual from private sources.  Investor repayments will be dependent upon timely realisation of Cash Management assets and Perpetual’s ability to refinance from private sources. 
Another investment vehicle, the Perpetual Mortgage Fund, is to be liquidated.  Repayments to investors have been frozen since early July.
High Court orders were made to have the two observers remain at Perpetual Trust to oversee the wind down of Perpetual Cash Management.  
Trustees Executors v. Perpetual Trust – High Court (3.08.12)
12.022