)
William O’Dwyer, the founder and former managing director of the failed Ralan Group, has pleaded guilty to six criminal charges following an investigation by the corporate regulator in the aftermath of the company’s $560 million collapse.
Ralan, a Sydney-based company that predominantly focused on its home market before making a splash on the Gold Coast in 2015 with plans for the $1.4 billion Ruby development in Surfers Paradise, has been charged with dishonestly obtaining $251 million to support his business operations.
The charges against O’Dwyer, who was declared bankrupt in 2021, relate to loans advanced to Ralan companies involved in residential projects in Sydney, Arncliffe, Turramurra and Gordon.
The loans – forwarded to the company between about 17 April 2015 and 6 June 2018 - were advanced by buyers of apartments in the form of pre-sale deposits.
However, the Australian Securities and Investments Commission says that as part of the loan agreements, the companies were required to satisfy lenders that these deposits were held in trust before drawdown on the loans could occur.
“Mr O’Dwyer deceived the lenders into believing that the pre-sale deposits were held in a trust account, when in fact they had been loaned by the purchasers back to the respective development company for use as working capital,” ASIC says in a statement released today.
“Approximately $132 million was drawn down upon the facilities, with approximately $47 million repaid by the time the companies in the Ralan Group went into administration in July 2019.
“A further amount is expected to be recouped by the lenders following their purchase and development of the Arncliffe property.”
In a damning revelation of the inner workings of Ralan, a report by liquidator Grant Thornton found that the development group had been insolvent since 2014 – or five years before its collapse.
The Grant Thornton report alleged that the company manipulated financial records which it provided to third parties such as banks in order to conceal the liability it owed to purchasers for their released deposits.
In 2015, an ebullient O’Dwyer made a play for his biggest development yet – the $1.4 billion four-tower Ruby Collection project which was to have included the redevelopment of the Paradise Resort at the northern end of Surfers Paradise.
Ralan had acquired the Paradise Resort site for $75 million a year earlier, with O’Dwyer declaring his motivation for entering the Gold Coast market was that the city was ripe with opportunity in the aftermath of the GFC.
"My peers in Sydney said I needed my head read because the Gold Coast was on its knees," O’Dwyer told Business News Australia at the time.
Ralan Group went into administration shortly after completing the first and largest tower of the planned Ruby development with the liquidation of the group ultimately including about 50 subsidiary companies.
At the time, Ralan had a development pipeline of more than 3,000 residential units in the construction or pre-sale stage.
O’Dwyer first appeared on the charges brought by ASIC in the Downing Centre Local Court on 25 July 2023 and he pleaded guilty to the charges on 22 August 2023.
A sentencing hearing is listed in the New South Wales District Court on 7 December 2023.
The maximum penalty for each offence is 10 years imprisonment.
Get our daily business news
Sign up to our free email news updates.
)
)
)
)
)
