Developer Salvatore ‘Sam’ Sgherza loses control of August Towers apartment building over $29m debt

AN Adelaide property developer has lost control of a $35 million city apartment building over debts owed to its financiers.

6/3/18 — August Towers construction site shot at 277 Hutt Street in the city. The developer is facing lawsuit for unpaid bills. PHOTO NAOMI JELLICOE

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EMBATTLED property developer Salvatore ‘Sam’ Sgherza owes $29 million to investors — including the owner of an exclusive Adelaide hotel — who bankrolled construction of a city apartment building.

The Advertiser can reveal that Adelaide finance company CEG Direct Securities has taken control of the $35 million August Tower building on the corner of Hutt St and South Tce from Mr Sgherza.

CEG Direct Securities, a non-bank lender, took control of the project from Mr Sgherza’s company South 2015 Pty Ltd in March triggering the former bankrupt developer to wind-up his company last week.

Mr Sgherza lodged a directors’ report with ASIC listing debts of $29.1 million to investors whose funds have been secured against apartments in the August Tower complex.

Among investors are Adabco Pty Ltd — parent company of Mayfair Hotel owner and operator Adabco Properties — which Mr Sgherza is listed as being owed $3.6 million.

Mr Sgherza has estimated $28 million in proceeds from apartment sales leaving investors $1.14 million out of pocket.

He also owes $658,706 to the Australian Taxation Office.

It comes as the District Court heard on Wednesday that his son’s company Build 29 — which built the August Towers property — is likely to be placed into liquidation.

Golden Grove company Buch Constructions has filed Federal Court winding up action against Build 29 alleging it owes money for the installation of fire doors at August Towers last year.

The winding up matter was raised on Wednesday in a separate District Court action involving Bianco Construction Supplies and Build 29.

Bianco is suing Build 29 for $177,800 in outstanding payments for work it did on the 14-storey August Towers project.

Bianco’s solicitor James Devonish of Lynch Meyer was granted an adjournment after telling the court that his client anticipated that Build 29 will be wound up.

He said the winding up matter was listed for a hearing on June 13.

The Advertiser revealed in March that Build 29 had been building the tower without a builder’s licence, which Mr Sgherza had blamed on an administrative error.