By James Atkinson
The former chief executive officer of a Western Australian hotel chain has appeared in the Downing Centre Local Court in Sydney following an investigation by the Australian Securities and Investments Commission (ASIC).
Bryan Raymond Northcote, who lives in Sydney, was charged on Tuesday, 25 September 2012 with three counts relating to breaching directors' duties and submitting false and misleading documents to ASIC.
ASIC's investigation focused on Northcote's activities while he was CEO and executive director of Compass Hotel Group Ltd (CHGL). CHGL floated on the Australian Securities Exchange in January 2008 and operated a West Australian hotel chain consisting of 12 hotels and taverns. CHGL went into receivership in March 2011 and its hotel assets were subsequently acquired by ALH Group.
It is alleged that between 9 October 2007 and 22 April 2008, Northcote dishonestly withheld information from the CHGL board and used his position to gain a financial advantage.
It is alleged that a company owned and controlled by Northcote, Yard House Australia and New Zealand Pty Ltd (YANZ) entered into a conjunctional agreement with a hotel broker whereby it would receive 50 per cent of all sales commissions paid by CHGL and vendors to the hotel broker for hotels purchased by CHGL. YANZ subsequently received $1.566 million in commissions.
It is also alleged Northcote submitted documents to ASIC that were misleading in that they falsely claimed he had resigned from YANZ on 1 October 2007.
Northcote was not required to enter a plea and the matter will return to Court on December 4.
A breach of directors' duties carries a penalty of five years' imprisonment and/or a fine of $220,000. Submitting false or misleading documents to ASIC carries a penalty of five years' imprisonment and or a fine of $22,000.
The Commonwealth Director of Public Prosecutions is prosecuting the matter.