How Salim Mehajer’s bid to stave off bankruptcy was nothing but fantasy

JAILED property developer Salim Mehajer claims $160 million worth of developments will return him to financial glory. But the reality is far different. Sunday Telegraph court reporter Brenden Hills unpicks the plans.

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JAILED businessman Salim Mehajer claims his financial future is bright thanks to property developments worth more than $160 million.

But the reality is very different. It is instead a glimpse into the mind of a fantasist.

When Mehajer fronted the Federal Circuit Court in April in a bid to stave off bankruptcy, he gave evidence that the first of five major property developments, which would line his pockets with millions, was set to begin from this month.

The only problem was what the former deputy mayor of Auburn didn’t tell the court — investigations by The Sunday Telegraph have revealed that development applications for four out of the five of construction projects have been ­rejected by councils and are unlikely to get off the ground.

Then there is the fact that a number of the properties have caveats placed on them by ­people chasing Mehajer for money, according to ASIC documents.

Disgraced former Auburn deputy mayor Salim Mehajer outlined plans to redevelop properties, but failed to tell the court they were all rejected by council. Picture: Jenny Evans

Another roadblock is the more than $80 million Mehajer will need to borrow to fund the projects in Lidcombe, Blacktown and Canada Bay.

He also owes $8 million to the Australian Taxation Office, the court heard.

According to financial ­experts, a loan of that size could be a tall order given ­Mehajer is now a bankrupt serving an 11-month jail term for electoral fraud.

Plus, his last major property development in Lidcombe, known as Skypoint Towers, was placed into administration when he defaulted on the $73.5 million loan.

It was a sentiment echoed in court by Justice Michael Lee when he rejected Mehajer’s ­application to stay his bankruptcy on April 29.

“It might be thought a somewhat heroic notion that an undischarged bankrupt will be able to secure financing to conduct the building activities referred to in Mr Mehajer’s affidavit,” Justice Lee told the court.

Mehajer told the court he needed the court to halt his bankruptcy to increase his chances of getting a loan. ­

“Unless the stay is granted, I will be significantly impeded in ­obtaining loan finance,” Mehajer told the court.

The biggest of the proposed projects was a 140-unit development at 13-21 John St, Lidcombe, which Mehajer told the court was “anticipated” to start in “mid-December 2018” and pull in an estimated $150 million.

Mehajer had plans to redevelop 103 Church St, Lidcombe.

Mehajer’s vision for 103 Church St Lidcombe

However, Cumberland Council documents showed ­development applications for the project had been rejected.

Mehajer launched legal ­action against council after it backflipped on selling him the carpark at 13 John St after discovering the sale was well under market value.

The Supreme Court ruled in favour of the council in March and a court spokeswoman said no appeal had been lodged by Mehajer’s camp.

The next was a property at 103 Church St, Lidcombe, which Mehajer told the court was to be converted into “five luxury townhouses” and would yield $3 million with construction to start from “July 2018”.

Similar problems existed with this development, with Cumberland Council documents showing three development applications on the site have been rejected.

It is the same story for 16 Frances St, Lidcombe, where two development applications were refused and an appeal lapsed on a plan to build a “luxury dual occupancy home” that Mehajer estimated would begin in January 2019 and ­return a “gross realisation” of $1.7 million.

At 555 Lyons Rd, West Canada Bay, Mehajer told the court construction would begin in July 2019 on a luxury two-storey home that would rake in $1.5 million.

Mehajer told the court he had plans to convert this Canada Bay property into a luxury two-storey home. The local council says it has not received a development application.

However, a Canada Bay Council spokesman said no dev­elopment application had been lodged on the property.

The properties for all four projects have caveats on them, according to property records.

The one bright spot for Mehajer was on Turner St, Blacktown.

Mehajer told the court he expected “this property to receive approval for nine townhouses” with an estimated $10 million in “gross realisation”.

Blacktown Council confirmed it had given an ­approval, in 2016, for 55A-D — but for a mixed-use development with eight units.

Again, ASIC records showed there is also a caveat on this property.

In an attempt to convince the court to stave off his bankruptcy, Mehajer offered up his Lidcombe home — made ­famous by his lurid 2015 wedding — as security.

The security offer was ­rejected after Mehajer’s trustee discovered he owes $5.2 million on the property, including $1.9 million on his mortgage with NAB.

This was despite Mehajer paying $565,000 for the property in 2007. It also has a caveat on it.

He also offered 1 Ann St, Lidcombe, up as security for a similar result.

Despite paying $857,000 for it in 2013, Mehajer owes $6.2 million debt on the property, the court heard.

Many of the proposed dev­elopment properties are owned by companies previously run by Mehajer before ASIC banned him from engaging in “acts of management”.

An ASIC spokeswoman said the corporate regulator’s Misconduct and Breach reporting area were examining Mehajer’s comments in court for possible breaches after being alerted by The Sunday Telegraph.

This included Meh­ajer telling the court he was still involved in the negotiations ­relating to the developments.