WA: Carey blames ASIC for Westpoint collapse

AAP General News (Australia)
12-08-2006
WA: Carey blames ASIC for Westpoint collapse

By Liza Kappelle

PERTH, Dec 8 AAP - Former Westpoint chief Norm Carey says the catastrophic collapse
of his property empire could have been avoided by the corporate watchdog.

Mr Carey told the Federal Court of Australia in Perth today Westpoint was in the process
of rationalising its "too complicated" 250 entities ahead of a public float when ASIC
wound up the group in February for alleged insolvency.

He was being questioned as part of an Australian Securities and Investments Commission
inquiry into Westpoint's collapse as ASIC seeks to reclaim assets for the mum and dad
investors who lost $300 million.

Mr Carey told ASIC's counsel, Stephen Owen-Conway, he "intended no disrespect" but
believed ASIC's move to collapse the group was "beyond belief ... when there was a commercial
solution available".

"There has been a catastrophic outcome that is almost unbelievable," Mr Carey said.

Mr Carey was quizzed about the group's corporate structure, particularly who had set
up, and why they had set up, the system which used Westpoint as a central treasury for
the group's complex network of trusts and other entities.

"When I started out 30 years ago, I didn't really know about corporate structures,"

Mr Carey said.

"I learned along the way."

He said it was one of his abiding business principles to employ experienced chartered
accounting professionals to conduct group's financial affairs.

Mr Carey said that was why he signed letters and deeds and other documents without
having any idea of their content, and why he could not remember sending millions of dollars
in and out of an offshore trust.

"I let things flow, I put them (the employees) in a position really of absolute trust," he said.

Mr Carey listed Westpoint's former chief executive Graeme John Rundle plus accountants
and consultants KPMG and law firm Freehills as those who were aware Westpoint's monies
were going into a central treasury.

"I find it staggering that with all the major knowledge around ... no one said `you
can't do this because it is in appropriate ... or improper'," Mr Carey said.

The cross examination continues today.

The court was told earlier that Mr Carey was the sole beneficiary of an offshore trust
called Halter, registered in the Channel Islands tax haven of Guernsey, to which he had
transferred more than $2.0 million since 2003 and withdrew $1.8 million dollars.

AAP lk/jt/bwl

KEYWORD: WESTPOINT

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