Adlers To Sell $12m Home Amid Wreckage Of Hih
Sydney Morning Herald
Friday June 1, 2001
The Adler family home at Point Piper, bought two years ago for $12 million and scheduled for a $2.4 million makeover, will be sold in the turmoil of the HIH insurance collapse.
After he agreed yesterday to put up $6.7 million as security against any court findings against him, businessman Mr Rodney Adler suggested demonstrations of wealth would be poorly timed.
``In light of the present legal situation, my wife has decided to sell her Point Piper property, as we believe it is inappropriate to continue with its development at this time."
Mrs Adler and Adler Corporation, the company she owns equally with her husband, were yesterday added as defendants to the Australian Securities and Investments Commission action over a $10 million payment a year ago from HIH to an Adler company, Pacific Eagle Equities.
Some of the money was used to buy shares in HIH, which went into provisional liquidation on March 15 with net losses estimated at up to $4 billion.
Mr Adler yesterday acquiesced to ASIC demands, not only dropping his fight against the surrender of his passport but agreeing to the hefty upfront security, while Mrs Adler agreed to put up $1 million against her house in Toorak, Melbourne.
If Mr Adler had given the same undertakings not to sell or shift assets as did other former HIH directors former chief executive Mr Ray Williams and former chief financial officer Mr Dominic Fodera in the Supreme Court last week, it seems unlikely the securities would have been demanded.
But Mr Adler objected, claiming it was an ``inconvenience and an embarrassment" to be instructed to surrender his passport and ``not to sell my assets".
In a statement released yesterday, Mr Adler said his assets would not be frozen once the securities were placed with ASIC. The case, he said, did not involve the HIH collapse and his agreements would ``facilitate the speedy resolution of these matters". That he could leave Australia on seven days' notice showed ``I am not a flight risk".
He said: ``We are both very upset and sorry about the terrible fate that has befallen all those involved with HIH." Mr Adler stressed, however, that he was not involved in the day-to-day operations and had ``personally lost substantially".
Meanwhile, an ``ultra-cautious" Prime Minister said the Government would extend its insurance regulation inquiries to all areas of prudential supervision, including superannuation, in which Australians have $500 billion invested.
``After the collapse of HIH, one of the things I am doing is running the ruler again over all the supervisory arrangements," he said.
Mr Adler is accused with Mr Williams and Mr Fodera of having breached directors' duties in making the $10 million HIH payment to Pacific Eagle Equities. Mr Adler said yesterday: ``The amount in dispute in this case is $6.9 million. As a sign of both good faith and the confidence of our position, security to the value of $7.7 million will be provided to ASIC."
Mr Adler will hand over $2 million by noon on Tuesday. Adler Corporation will put up 14.2 million shares in Medicine Quantale Ltd and 8.3 million shares in Neighbourhood Cable Ltd until Mr Adler comes up with another $4.7 million in alternative securities by September.
The matter is next listed before Justice Santow on July 2.
© 2001 Sydney Morning Herald
