Business

Investment company charges $23m bill after losing $10m

A LISMORE bank is caught up in a dispute over almost $30 million between two Australian investment managers and the Papua New Guinea Government.

Woodlawn Capital is registered as a Lismore-based investment management company under owners, Timothy James McNamara, 43, and Timothy Patrick Breen, 40, who work from Sydney.

They linked up with state-owned PNG company Motor Vehicle Insurances Limited in 2009 and were entrusted to invest $43 million of taxpayer funds.

The PNG Government moved to end the relationship in 2011 and Woodlawn Capital repaid $4.2 million.

However, they also sent a $23 million termination bill to the PNG Government even though the investment kitty had bled about $10 million under their stewardship, according to court documents.

What remains of the original $43 million investment is kept in Woodlawn Capital's account, listed at the Lismore Commonwealth Bank.

The PNG Government, through Motor Vehicle Insurances Limited, has taken legal action in the New South Wales Supreme Court to have the money returned with interest.

Mr McNamara took responsibility for the $10 million losses in a sworn affidavit, saying he had invested "because I had confidence in the strength of the Australian economy and its markets at a time of global weakness".

"If I had had the benefit of hindsight at the time, I would have taken reverse positions and been hailed as a hero," he said.

"In the events which happened, my confidence in the strength of the Australian economy and its markets was not justified and I lost my client money."

Justice James Stevenson handed down part of his judgment, finding Woodlawn Capital had breached its contract and had engaged in "misleading or deceptive conduct" by operating without an Australian Financial Services Licence.

The court also heard Woodlawn had "co-mingled" funds with its own on several occasions, including a single $32,135,206 transfer from its client's account to its own in August, 2011.

On the same day, another $5 million was transferred, followed by an extra $5 million the following day.

The money was returned to the original Motor Vehicle Insurances Limited more than a month later.

Justice Stevenson did not accept Mr McNamara's evidence the transfers were due to "banking errors".

Motor Vehicle Insurances Limited enlisted expert financial assets trader Robert Risk, who gave evidence Woodlawn Capital's trading strategy was "not one of competent or careful trader".

"The potential was for the market to go down even further than it did, because in my opinion, the market was nearing pressure points similar to during the GFC," he said.

"Justice Stevenson said Woodlawn had no entitlement to the $23 million in fees it had demanded, other than those which had already been accrued by the time the contract was terminated.

The case is ongoing.

- APN NEWSDESK

Topics:  investment




Local rugby team dons pink at Jodie's charity day

The Marist Brothers Rams wore pink to support Jodie McRae (centre) and her charity, Jodie's Inspiration, at the Rugby League Football Club Day on the weekend.

Marist Brothers help Jodie's Inspiration raise money for hospitals.

Kicking the TinCAN art show to help the elderly

CATCHING A TRAIN TO MOROCCO: This was one of the entries in the Tintenbar Art Show's photographic competition. Photo Contributed

The Tintenbar Art Show is on again over September

Fun time to run after the Olympics are over

FINISHED WELL: Runners in the Greater Casino Fun Run cross the line last year. Photo Samantha Elley / Express Examiner

Starlight Children's Foundation to benefit from fun run

Latest deals and offers

Reno stars want tradies to focus a little more on one thing

The Demmrichs want Tradies to look after their most important tool

Fashionistas show off at Splendour in the Grass

Amberly Nelson, from Melbourne, posts for a photo with friends at Splendour in the Grass.

GLITTER, skin and mesh were all on show at festival this weekend.

Day 2 Splendour Pictures

Sticky Fingers perform at Splendour in the Grass 2016. Photo Marc Stapelberg / The Northern Star

Splendour in the Grass Day 2 covered in pictures.

WATCH: News reader tries her hand at hardcore shooter, Doom

Veteran journo and noob gamer takes a shot at Doom

What's on the small screen this week

MasterChef Australia's final four contestants, from left, Harry Foster, Elena Duggan, Elise Franciskovic and Matt Sinclair.

MASTERCHEF makes way for The Bachelor on Ten's reality TV slate.

Splendour found The Cure

Robert Smith at the Splendour in the Grass Amphitheatre stage during The Cure's show.

Day two of Splendour in the Grass

You can own this Queensland town for just $1

Yelarbon

Unprecedented auction of town's business centre with no reserve

Work starts on $15M Caloundra apartment building

Turning the first sod at the Aqua View Apartments site in Kings Beach are (from left) husband-and-wife developers Alex Yuan and Stella Sun with construction company Tomkins director Mike Tomkins and Councillor Tim Dwyer.

Developers excited about addition to Kings Beach skyline

Plans revealed for 1500-lot 'master-planned community'

Precinct will be bounded by Boundary St and Shoesmith Rd

Ecco Ripley sales run sparks prime release

MOVING IN: Sekisui House has announced the release of more residential blocks at Ecco Ripley.

Sekisui House is preparing to unveil more land at Ecco Ripley

Massive residential 9-storey high-rise hit by delays

An artist’s impression of the eight-storey-high apartment complex that Bernoth Holdings wants to build in South Toowoomba, next to the City Golf Club.

Developer struggles to get approved high-rise development started