Where are they now? Part III

They may have blown a cool $30 billion of investors' savings but, for the fallen heroes of the sharemarket boom it's business as usual. In a three-part series, BusinessDay's reporting team looks at what happened to the superstars of yesterday.

Where are they now, Part I
Where are they now, Part II

Storm Financial The Cassimatises

EMMANUEL Cassimatis and his wife, Julie, were the jetsetting founders of financial services firm Storm Financial, with plenty to show for it.

The charismatic pair were a fixture of the Townsville social scene, and they led an inner-circle of devoted investors on opulent junkets around the world.

Since the collapse with the loss of $3 billion in investors' money, however, they no longer live in their multilayered wedding cake house on a hilltop in Townsville.

The eight-bedroom, five-level house - reported to have been based on a Waterford crystal chandelier - has been for sale since January last year. And the six-seater private jet has gone.

The couple, now living in Brisbane, have not cut their ties with Townsville, and reportedly will attend the wedding of Cassimatis's third daughter, Kerani, there on June 26.

The palatial Brisbane home in Belmont features a helipad, a ballroom and a driving range - luxury compared with the fate of Storm's 3000 investors, most of whom are still caught in a fight with banks about compensation.

Little has been seen of the couple since early last year when Cassimatis promised in a media release he would continue a ''crusade'' for justice for his clients ''until my dying breath''.

Cassimatis's public appearances have been limited to last year's parliamentary committee hearings investigating the collapse and an appearance at the liquidator's publicly funded investigation.

In another rare public foray, Cassimatis wrote to investors in March ''as a concerned friend'', criticising a CBA dispute resolution scheme and recommending a law firm for investors to pursue action against the banks.

Following the liquidators' examination, they compiled a 77-page report of suspected breaches of the Corporations Act, including possible criminal breaches by Cassimatis.

City Pacific Phil Sullivan

PHIL Sullivan used to live just around the corner from City Pacific's headquarters in Miami Keys, Broadbeach. He has apparently stayed put, but the Gold Coast property developer's old headquarters is now the home of Queensland gas explorer Icon Energy, a company that probably offers a more solid product than City Pacific ever did.

Contacted by BusinessDay, Sullivan confirmed he had continued to help City Pacific's receivers sift through the debris early this year.

''I've had a couple of meetings with them,'' he said. ''I don't think there's anything else I can really assist them with.''

There was certainly nothing further he could assist BusinessDay with when it came to answering questions about what he is up to now.

Unlike the collapse of his property development company in the 1980s - which sent Sullivan bankrupt - he was forced out of City Pacific in November 2008, nine months before it collapsed and his wealth is more or less intact - so far.

Whether his fortunes are due for a change depends on ASIC's investigation of the company's lending practices and management of the $900 million First Mortgage Fund before its collapse. A liquidator's report is also expected to explore legal options that would be the only way for unsecured creditors to recover their money.

 

Westpoint Norm Carey

NORM Carey is back. Four years after the Perth entrepreneur's property finance business Westpoint Group collapsed with the loss of $380 million, Carey has won back his real estate licence.

The decision in the West Australian Court of Appeal on Thursday came despite Carey and others facing continuing action by the Australian Securities and Investments Commission in relation to the collapse of Westpoint.

The court judgment also went through Carey's initial denials to a lower court that he had anything to do with a bank account in Singapore for a company called Halter Limited.It later came out that Carey had authorised a $500,000 payment from the account.

In 2006 the Real Estate Agent Supervisory Board ruled Carey should not have his licence renewed, based on his behaviour in the receivership of the Westpoint companies and his evasiveness or dishonesty in relation to Halter.

But, on an appeal by Carey, the State Administrative Tribunal ruled that although Carey was being sued there was insufficient evidence to regard him as unfit to hold a real estate licence.

The supervisory board then took the case to the Court of Appeal, which ruled the tribunal had not made an error when awarding the real estate licence to Carey.

Carey has held a real estate licence since 1979, and he has been fighting for his licence to be renewed since the supervisory board knocked him back.

ASIC says it has recovered $100 million of the Westpoint money, and in addition to the action against Carey and others it has an ongoing $200 million court action against Westpoint's auditor, KPMG.

 

MFS Michael King

TWO years after the collapse of his Gold Coast investment group, Michael King says he has cleared his personal debts and realised some truths.

''I've got negative plans,'' he says. ''I'm never going to be involved in a public company again, never going to be CEO of a big organisation again, and never going to be in financial services again.''

It may be small comfort to the MFS creditors who are owed close to $2.5 billion.

King, 45, says he is living at his Elysian Fields polo estate, which remains for sale. Under a personal insolvency agreement he has struck, whatever the bank doesn't take is to go to creditors.

King and his colleague Phil Adams were lawyers at a Gold Coast law firm in 1999, when they set up MFS as McLaughlin Financial Services. It later became Octaviar.

By May 2007, their combined personal wealth was $370 million, according to BRW.

Within a year, King and Adams had both dropped off the rich list and owed $127 million on margin loans.

MFS was once worth $3.2 billion, but its collapse revealed intercompany loans totalled $1 billion.

King is yet to face examinations into MFS, but says he is looking forward to it.

He is also facing charges in the Queensland Supreme Court, brought by the Australian Securities and Investments Commission, relating to a loan from Royal Bank of Scotland. The loan was meant for the Premium Income Fund, but was allegedly used to repay $100 million to US lender Fortress Credit.

''It's tragic that people lost money,'' King says. ''Some of my best mates lost fortunes, so if you don't think that affects you, you're kidding yourself.''

King says he has ceased all involvement with MFS entities and is now consulting. ''Just general business stuff, nothing to do with financial services or anything like that. It keeps me busy, trying to make a buck.''

 

Reporting team: Stuart Washington, Colin Kruger and Kate Lahey