A LOCAL businessman trying to get to the bottom of a deal he says cost him ownership of Fremantle’s National Hotel has found he’s slipped between the cracks of Australia’s financial regulators.
Sean Butler was part-owner of the hotel when it was put into receivership by Bankwest in 2011, along with his construction company and the Lighthouse Hotel in Bunbury.
Mr Butler had never missed a loan repayment and his businesses were trading profitably, but a decision to sell the Lighthouse Hotel went pear-shaped. His business partner offered to buy him out, matching an offer they’d received for $14 million, but that didn’t go through. The $14m offer was no longer on the table, triggering the receivership.
Adding to Mr Butler’s woes, Bankwest suddenly devalued the hotels by 20 per cent, triggering a default and kicking in high penalty rates. It had done the same thing to dozens, if not hundreds, of businesses around the country.
His partner then bought the Lighthouse from the receivers for $9.3m and the National was sold to another company for $3.6m—both deals done without Mr Butler’s knowledge, even though he was still a director.
He was so incensed by his treatment he fronted a Senate inquiry into the banking system in 2012. Bankwest would only give its evidence in secret.
Mr Butler also claims the bank and receivers Taylor Woodings failed in their duty to him as director of the companies by withholding financial information.
When his companies were released from administration and his bank accounts returned, he discovered they’d been emptied, often without explanation.
One withdrawal of almost $150,000 from his construction company on December 20, 2011, was simply marked “details advised separately”. Mr Butler says no-one will tell him where the money went.
Similarly, two withdrawals just days apart totaling more than $70,000 are referred to as going “to receivers account” with no explanation why.
Since then Mr Butler has appealed to both ASIC and the banking ombudsman to look into his case.
But ASIC has told him his case is too small to investigate, while the ombudsman says it’s too big.
Bankwest claims Mr Butler owes it more than $4m but has offered to walk away if he’ll drop his counter-claim and keep quiet. He reckons he’s owed millions and wants an independent arbitrator brought in to sort things out.
He says he’s considering breaking his claim into smaller components to try to get the ombudsman interested.
Bankwest told the Herald its relationship with Mr Butler came to an end some years ago and it wouldn’t comment further because of client confidentiality. It had its lawyers write to Mr Butler earlier this year saying it was ending all communication.
by STEVE GRANT