‘Dishonest and fraudulent' scheme: Bankrupt property developers ordered to repay $66m
Federal Court Justice Ian Jackman said that the trio had breached sections of the Corporations Act, which stipulates that directors must act in the company's best interest.
In this case, their company, Special Gold, purchased a property on Argyle Street, Parramatta, for $2.6 million in 1998 and sold it for $73.97 million in late 2020.
On December 17, 2020, the Supreme Court imposed a freezing order preventing Special Gold from dealing with the proceeds of the sale.
On the same day, Special Gold's directors Sam and Fayad-Lee opened a bank account with the State Bank of India (SBI). Five days later, $34 million from the property sale was deposited into the newly opened SBI account.
Millions of dollars then flowed from the SBI account to pay for other dealings that the Fayads had on the boil. None of these transactions appeared to be of any benefit to Special Gold and had been prohibited only the previous week by the freezing orders, the judge found.
For example, on December 23, $13.25 million went from the SBI account to Remon Fayad's company to purchase shares in another company.
'The payments by Special Gold for those share purchases … constituted a dishonest and fraudulent design on the part of Sam and Fayad-Lee, to the knowledge of Remon,' said Jackman in his judgment delivered on Tuesday.
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