The managing director of failed Sydney developer Ralan Property Group has pleaded guilty to six fraud-related offences.
After 20 years in business, Ralan Group collapsed in 2019 leaving behind a $2-billion development pipeline of more than 3000 residential units with hundreds of off-the-plan buyers.
Founder William O’Dwyer has since been the subject of an investigation by the Australian Securities and Investments Commission (ASIC) relating to “unsecured borrowing arrangements”.
The current charges relate to loans advanced to group companies that were involved in development projects in Sydney, Arncliffe, Turramurra and Gordon.
The Ralan companies were required to prove pre-sale deposits by the purchasers of off-the-plan residences in these areas were held in trust, before drawdown on the loans could occur.
In fact, ASIC says O’Dwyer deceived the lenders into believing the pre-sale deposits were held in a trust account, when they had actually been lent by the purchasers back to the development company to use as working capital.
According to ASIC, between 2015 and 2018, O’Dwyer dishonestly obtained through these activities the ability to draw down on finance facilities of $251 million.
The commission reported that $132 million was drawn down upon the facilities, with about $47 million repaid by the time the companies in the Ralan Group went into administration in July 2019.
Lenders purchased and redeveloped Ralan’s Arncliffe property, which was supposed to be turned into a 318-apartment Sydney development, and they are expecting to recoup further funds in that process.
O’Dwyer has now pleaded guilty after appearances at the Downing Centre Local Court from July this year, following a referral to the Commonwealth Director of Public Prosecutions by ASIC.
A sentencing hearing is listed in the New South Wales District Court for December 2023.
Administrators from Grant Thornton were appointed to the Ralan Group of companies in July 2019 by a resolution of the group’s directors.
According to analysis from lawyers at Corrs Chambers Westgarth, more than 50 entities were involved in the voluntary administration, which was followed by a liquidation, owing more than $238 million to secured creditors and another $323 million to unsecured creditors.
Later that year, some of those creditors agreed a controversial salvage deal that gave them discounts on other apartments, predominantly in Sydney.
It was later revealed that O’Dwyer had teamed up with Sydney developer Toplace’s Jean Nassif, to orchestrate the deal.
