FLASHBACK: It's 2008 and owner/builder Peter Comino (left) and Paul Mills discuss the upmarket features and finishes for the five-star apartment development in Bolsover Street, Rockhampton.
FLASHBACK: It's 2008 and owner/builder Peter Comino (left) and Paul Mills discuss the upmarket features and finishes for the five-star apartment development in Bolsover Street, Rockhampton. TAMARA MACKENZIE.

Banking blunders cost me $14m

PETER Comino once boasted a $14 million property portfolio and was poised to lead Rockhampton's growing foodie culture with a high-rise boutique apartments and coffee shop.

But in the wake of the Global Financial Crisis in 2008, Mr Comino's bank "panicked" with low capitals in reserve and pulled their support.

This chain of events forced him into bankruptcy.

Mr Comino has every reason to feel bitter, yet he is calm and softly spoken when explaining his "financial homicide".

In 2010, the CBD Executive Apartments on Bolsover St was set to become the centrepiece of Mr Comino's development portfolio.

But he was systemically forced into bankruptcy while it was still in final stages of construction, losing over $14 million as the bank quickly sold off his property portfolio.

 

The CBD Apartments. In August 2012, the completed 4.5-star, 18-room boutique motel sold for $6 million freehold.,
The CBD Apartments. In August 2012, the completed 4.5-star, 18-room boutique motel sold for $6 million freehold., Allan Reinikka ROK080618acbdapar

Mr Comino also lost his professional real estate and building licences, and consulting positions with major national and international companies.

"I've lost close to everything bar the shirt on my back," Mr Comino said, speaking to The Morning Bulletin at the cafe which should have been his greatest success story.

"I'm starting again, but I will not shut up."

When asked how he has managed to maintain such a positive outlook in the face of devastating personal losses, he answers quickly.

"I've got two magnificent sons, that's my kryptonite," he said.

The collapse of his career has also taken its toll health-wise.

Mr Comino admits he holds little faith in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry uncovering all the facts, but believes the terms of reference needs to be expanded and big bank CEOs called to answer tough questions.

Australian banks have paid more than $1 billion in fines and compensation for rorting their clients since the Global Financial Crisis.

Among these scandals there have been accusations of rate rigging, forged signatures, overcharging fees, and the creation of unauthorised investment accounts.

The 'big four' (Westpac, ANZ, Commonwealth Bank and NAB) have all been implicated in various dodgy financial practices.

Mr Comino says the bank's chosen receivers and other agencies should also be investigated by the royal commission.

Mr Comino believes he was also a victim of the ruthless stop-at-nothing drive to maximise bank capital reserves at the time of the global financial crisis.

In 2009, Mr Comino had built his property portfolio under Sypcom Pty Ltd to include the $4.7 million City Ville Apartments, a $1.2 million residential property on Victoria Pde, and the $6.2 million property which would become the CBD Executive Apartments.

In addition to this, his management rights equated to approximately 45% equity.

Mr Comino had seen the potential to capture Rockhampton's growing 'foodie' culture in a dining space supplementing his short-term apartments.

On October 20, 2009, Mr Comino was sent an email stating there was a $217,477.52 remaining balance from the previous draw on his construction loan and the loan was "not fully drawn yet".

The next day he received a fax stating the same information, however, it included an additional paragraph stating his overdraft account had an available balance of $103,982.61 which could "be used for any over runs".

This correspondence was in response to Mr Comino's request for clarification about available balances, as his quantity surveyor's calculations weren't on par with the bank's progress claim.

"They lulled me into a false sense of security," he said.

"My quantity surveyor's figures showed I had less money, but I wanted clarity from the bank."

Construction was being finalised and Mr Comino believed, based on this information from ANZ, he had sufficient funds to finish.

He claims he could not make any further withdrawals as the bank falsified his accounts to create a credit default.

Mr Comino claims the bank deliberately gave him misleading information about the loan to allow it to progress using trades and supplies for a further four months.

In January 2010, the ANZ credit department met with Mr Comino and asked him what he was going to do should the funds run out.

They said they would not pay tradespeople from the proceeds of the sale should the development be sold.

Later that month Mr Comino was told all the funds had been used and BDO Kendalls would conduct a forensic investigation.

Mr Comino agreed, but was reluctant to accept their fees of roughly $26,000.

He recently found out ANZ also engaged his personal accountant to prepare fully bound documents at his cost for a meeting with the bank's credit department.

Facing increasing anger from contractors and suppliers on the apartment building, Mr Comino was under pressure to sell.

ANZ had agreed to fund the project at $5.3 million (plus a standalone facility of $200,000 for GST) and within six weeks, Mr Comino had obtained an unsigned offer for $5.5 million for the Rockhampton apartment complex.

The offer included $4 million cash and land worth $1.5 million with approved development applications at Mackay, which was not income producing.

The offer collapsed when Mr Comino disclosed, as required by Queensland property laws anything which adversely affected the value of the property.

In this case the disclosure was the ANZ funding withdrawal, where non-payment would have affected workmanship, and plant and equipment warranties.

The same person later bought the complex for $4.5 million, comprised of $3.3 million cash and the Mackay development site.

Mr Comino said the bank failed in its obligation to secure the best price for both parties in accordance with Section 420A of the Corporations Act.

He said they did not reject offers well below the realistic value (and the amount owed).

Mr Comino said the property should have been auctioned to achieve a sale price closer to the true value.

In August 2012, the completed 4.5-star, 18-room boutique motel sold for $6 million freehold.

 

The CBD Apartments
The CBD Apartments Allan Reinikka ROK080618acbdapar

The value of plant and equipment, goods and chattels was not disclosed.

Mr Comino took his concerns to the Australian Securities and Investment Commission (ASIC) on several occasions, the first in August 2011.

He told them ANZ had given misleading information to create an event to activate a systemic Credit Default Swap , but not disclosed with the 90 day bill swap rate and lending facility.

However, he was told in a letter from ASIC that the regulator's focus "must be to address systemic misconduct in the public interest".

"ASIC's role does not generally extend to taking action against licensees on behalf of individuals in relation to their private disputes," the letter stated.

Last month, ASIC reported a deluge of customer complaints and bank breach notices in the wake of the Royal Commission but has not disclosed what complaints were made during the GFC.

The corporate regulator also admitted they only learned of some banking misconduct, such as improper use of children's accounts and charging fees to dead clients, through media reporting on the Royal Commission.

Mr Comino said ASIC should investigate the use of Credit Default Swaps used in 90 day bills by banks, which was central to his lending facility.

"They will always now celebrate my name as a former bankrupt," Mr Comino said.

"I want the past and present CEOs dragged, kicking and screaming, into the Royal Commission."

An ANZ spokesperson said the bank did not comment on specifics of individual customers' banking details.

"ANZ does not believe it has a case to answer in this matter and totally rejects the customer's allegations," they said.

Peter Comino has been invited to provide a submission to the financial services royal commission.

He is currently working on that statement.

Yesterday The Australian reported that a key part of the commission's focus during its special Brisbane hearings next week would relate to 2009 when the ANZ and the Commonwealth banks brutally cracked down on what they saw as impaired or high risk loans to specific North Qld farmers, after the banks had taken over the loan book of the Landmark group.

"But we hadn't done anything wrong, we'd made all our payments, but our budgets were all changed and they put us into default," one of the affected farmers, John Wharton, told The Australian.

All the major banks contacted by The Australian declined to comment.



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