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



OPINION: Think before putting your foot in your mouth

For the past week I've had a big black eye and a bandage on my head

World of health comes to our shores

Dr Robin Miller

Workshops and events for health professionals with world experts

Getting our kids involved with native fauna protection

Upper Main Arm Public School at West Byron wetlands.

Successful education program reaches five schools and 334 students

Local Partners

Getting our kids involved with native fauna protection

NORTH Coast Local Land Services and Byron Bird Buddies are working together to encourage the community to talk about how to protect Byron's native fauna.


This weekend's markets list

BIG VOICE: Ron the Coffee Man is a popular and regular stallholder at a number of local markets.

Where to get fresh local produce from

REVEALED: A new Northern Rivers music festival in 2017

Lismore Music Festival co-directors Scott Cooper and Paul Connelly.

Mark March 10 and 11 in your calendar

Not ten, but fifteen awesome things to do this week

ANNIVERSARY: Charity day party Nudge Nudge Wink Wink has raised almost $20,000 for local organisations in its first year of events.

This busy week we have pretty much every possible event you may want

What's on the small screen this week

Ernie Dingo stars in the TV series Going Places with Ernie Dingo.

ERNIE Dingo stars in a new travel series and Seven airs the AACTAs.

Mandy Moore feels like she's 60

Mandy Moore sees herself as a 60-year-old rather than a 32-year-old

Goooodbye Hamish and Andy (from our radios)

Hamish and Andy

The pair have been on air since 2006

David Attenborough on facing his mortality

Sir David Attenborough in a scene from the TV special The Death of the Oceans.

Life without Sir David Attenborough is hard to imagine

Saying "I do" changed Shia's outlook on marriage

Shia LaBeouf has a new outlook on marriage since he tied the knot.

Singer tunes in to first movie role

Tori Kelly voices the character Meena in the movie Sing.

Musician Tori Kelly voices Meena the teenage elephant in Sing

Chinese locked out of Australian property market

The rules are different if you're a foreigner

The buyer was from China - the trouble started right there

Morrison signs off on new affordable rental model

Australia's Treasurer Scott Morrison speaks during a press conference after a meeting of the Council of Federal Financial Relations at Parliament House in Canberra, Friday, Dec. 2, 2016.

Scott Morrison signed off on development of a new financing model

Coast high-flyer's fight back from bankruptcy, $72m debt

Scott Juniper went from millionaire developer to declaring bankruptcy in2012, now he is back on top of his game again with new developments including this one in Coolum.

'Apocalyptic lending storm' causes financial collapse.

How your home can earn you big $$$$ this Christmas

This luxury Twin Waters home rents out over Christmas for more than $6000 a week.

Home owners earning thousands renting out their homes this Christmas

2000 jobs at multi-million dollar Ipswich project

INSIDE: Artist's impressions of the interior of the new Eastern Heights aged care precinct.

Sub-contractors needed to build $15m aged care facility

Ready to SELL your property?

Post Your Ad Here!