Property developer Mark Stockwell and team cleared over corporate fraud claim

A VERY detailed account of an alleged corporate fraud at a Brisbane property developer was forwarded to ASIC earlier this year, and now the corporate cop has released its findings.

Mark Stockwell’s company has been cleared of corporate fraud. Picture: AAP/ Ric Frearson

IN THE CLEAR

BRISBANE property developer Mark Stockwell and his team have been cleared by ASIC over a corporate fraud claim.

A very detailed account of an alleged fraud inside the Stockwell group was forwarded to ASIC by a disgruntled former employee earlier this year.

The corporate cop investigated the claims, reviewing company documents, examining bank statements and interviewing key players.

But in a letter to Stockwell’s co-director (and brother-in-law) Michael Kelso last week, ASIC said it had wrapped up its surveillance “and based on information received to date, we will be taking no further action’’.

So what exactly were investigators picking apart?

Well, it was alleged that Stockwell and Kelso had improperly transferred $5 million from their Virtuoso Investment Trust, which was launched in 2016 to raise up to $17.3 million from investors to partly fund the Virtuoso unit project in the West End.

The money was allegedly used to make the first principal repayment in June last year to noteholders in a completely unrelated $35 million corporate bond issued by the Stockwell group in 2015.

“The proceeds from the bond had been fully used by December 2016 and, because of the slowing property market, the group was faced with the prospect of not having sufficient cash to make the $5 million bond payment in June 2017,’’ the ex-staffer told ASIC.

“The plan was that when settlements occurred from another property development the group was delivering, then the cash would be transferred back in to the Virtuoso Investment Trust bank account.’’

Stockwell, the former Olympic swimming medallist, denounced the allegations yesterday as “entirely fabricated’’ and he attacked his unidentified former colleague as someone “with an axe to grind’’.

“ASIC has carried out an investigation and found nothing,’’ he said.

The Virtuoso complex is still under construction on a Ferry Rd site once home to the Queensland Symphony Orchestra.

All but about 10 of the 77 units have sold at prices starting from $1.4 million, with settlement expected early next year.

Stockwell declined to say how much the seven-level project would be valued at upon completion but it’s understood to be around $100 million.

RETAIL ABSENCE

As beleaguered Retail Food Group struggles desperately to regain its mojo, you might think they would appoint a few new people to the board with actual retail experience.

You know, people who had actually run a business selling coffee, bread doughnuts, pizza and all the other categories under the RFG umbrella.

But you would be wrong.

The Gold Coast outfit used the expected departure of long-serving chairman Colin Archer yesterday to announce the appointment of two new non-executive directors, David Grant and Peter George.

Grant is currently a director of the Murray Goulburn dairy cooperative and Event Hospitality and Entertainment, which runs cinemas, resorts and hotels. Previously he worked at iiNet and Consolidated Rutile.

George has a track record in telecommunications, media and corporate finance, including four years on the board of Optus. He also spent five years as head of marketing group PMP.

With veteran bean counter Stephen Lonie set to step up as RFG chairman, one retail industry player who follows the company closely sounded utterly exasperated.

“It’s simply more of the same with accountants and old school directors for a retail company that has no retailers!,’’ he told your diarist.

“You have to ask where are your experienced retailers?’’

The reshuffle at the top of RFG comes as speculation continues to bubble away that private equity players are poised to mount a hostile takeover bid.

Their interest ramped up after RFG posted a shocking $306.7 million net loss in the last financial last year and closed 250 stores.

Talk of a potential class action is also in the air after the share price tanked following revelations of alleged mistreatment of franchisees.