Leigh to defend PPBA/Neolido fraud claim

defend

David Leigh, former liquidator of Neolido Holdings

David Leigh, the former PPB Advisory (PPBA) partner who stunned the profession after it emerged he had allegedly pinched $800,000 to pay debts, is set to stun again.

In the Supreme Court of Queensland yesterday, Leigh filed a notice of intention to defend a claim for recovery of the funds, launched on February 28, 2018 by PPBA.

From what can be gleaned from the document and its responses to PPBA’s statement of claim, Leigh, while making some admissions, is unwilling to capitulate entirely while an investigation by the corporate regulator is still underway and an assessment of the state of his mental health at the time of the alleged offending remains incomplete.

“The Australian Securities and Investments Commission (ASIC) commenced an investigation into the defendant’s conduct as liquidator of the first plaintiff (Neolido Holdings), in particular to the matters alleged in these proceedings and pending the completion of that investigation an admission or denial by the defendant to particular allegations herein may prejudice the defendant’s position in that investigation,” the defence said.

The document identifies the ASIC investigation as a “prejudice ground” upon which Leigh is basing his decision to defend PPBA’s claim. It incorrectly states that the ASIC investigation commenced “in or around late 2017”.

During our efforts to corroborate the document’s contents SiN learned that the ASIC investigation commenced in the immediate aftermath of the alleged fraud being uncovered on February 19, 2018 by Leigh’s former colleague and former joint liquidator of Neolido, Grant Sparks.

Treatment and assessment of Leigh’s mental health forms what is described as the “capacity ground”. “The term “Capacity Ground” means that the defendant is undergoing medical treatment and assessment regarding his mental state and capacity and is currently in the process of obtaining a diagnosis as to his mental state and capacity in the period from at least mid 2017 to February 2018,” the defence said.

Whatever his mental state was in the latter half of 2017, it didn’t prevent Leigh from successfully negotiating a senior role as head of restructuring in Queensland with HLB Mann Judd, a role he commenced in January this year and then relinquished, days after the alleged fraud was discovered.

According to PPPBA, the alleged misappropriation took place between July 25, 2017 and November 9, 2017. On February 20, 2018 during an interview with PPBA partner Michael Owen and Allen’s partner Geoff Rankin who is acting for PPBA, Leigh allegedly admitted using $700,000 to pay his debts and transferred the remaining $100,000 to one of Neolido Holding’s secured creditors, South Australian-based lender of last resort Capital Access Australia (CAA). SiN understands that CAA has since confirmed it received the $100,000.

Leigh’s defence also relies on “knowledge” and “particulars” grounds relating to denials he had knowledge of various matters alleged in PPBA’s statement of claim and refusals to admit to various assertions made by PPBA because documentation relating to certain particulars had not been provided to Leigh’s lawyers at the time the defence was filed.

Meanwhile, SiN understands that PPBA, its insurers and Neolido Holding’s new installed liquidators BDO’s Andrew Fielding and Helen Newman are on the verge of concluding a deed of settlement that will see the $800,000 repaid to the Neolido liquidation account. Once the funds have been received it’s expected that Neolido Holdings will withdraw from the action against Leigh.

Further reading:

EU Clue To Leigh Fraud Fallout For PPB Advisory

About the Author

Peter Gosnell
Insolvency News Online illuminates the practice of insolvency Australia-wide, highlighting the triumphs and travails of the nation’s registered practitioners and the accounting and legal professionals who work with them. INO is produced by Peter Gosnell, former business editor and senior business reporter at The Daily Telegraph newspaper. During a decade-long career, your correspondent reported on such notable corporate collapses as HIH, One.Tel, Westpoint and Fincorp as well as some of the nation's highest profile bankruptcies and the investigations and prosecutions arising from Australia's most notorious instances of white-collar crime.

4 Comments on "Leigh to defend PPBA/Neolido fraud claim"

  1. It has been published that from July 2017 and as at 28 February 2018 David Leigh was managing 9 liquidations and 19 bankruptcies. He did not voluntarily resign from any of those positions on the ground of incapacity. In fact, when he was formally requested to resign for breaches of duty – including unlawful transfer of property to himself – he refused. If David Leigh seeks to be deemed of impaired capacity as a defence to claims of misappropriations from July 2017 to February 2018, then contracts he entered and the transactions he effected to his financial benefit during that period should be set aside on that ground. EDITED: “In December 2017 Leigh also ………………………………………” ?

  2. Anon, please contact me at editor@sydneyinsolvencynews.com.au in relation to the unsubstantiated claim which I’ve withheld from your comment above until it can be corroborated.

    Regards,
    Peter Gosnell,
    Editor & Publisher

  3. In late 2017 David Leigh held 68 appointments as liquidator and trustee. On 20 December 2017 he and the other “partners” filed an application to the court to enable him to resign from a number of these. The sole reason he stated for resigning was that he was leaving PPB Advisory. However, he continued with all appointments, as the application had not been heard, until his registrations as liquidator and trustee were suspended on 23 February 2018. He did not assert that he had impaired capacity prior to 20 February 2018. In fact, accepting 68 appointments suggests he held the view that he was competent to a superhuman degree (or just avaricious). It would be in the public interest to have information about the accounts of the 67 other files (excluding Neolido’s) that he managed. He was, in his positions, an officer of the court and as such accountable.

  4. A company liquidator has been charged with three counts of fraud over the withdrawal of $800,000 in funds from a liquidation account that was spent on personal purchases.
    Queensland man David John Leigh, 56, will appear at the Brisbane Magistrate’s Court on 2 November to face the fraud charges, which are the result of an ASIC investigation into the liquidation of a South Brisbane property development business.
    That business, Neolido Holdings, was wound up in November 2005 at the behest of a court order. Five years later, in October 2010, Mr Leigh was appointed as a co-liquidator of the company in his role as a partner at PPB Advisory – which was taken over by PwC mid this year.

    ASIC has accused Mr Leigh of transferring a total of $800,000 from Neolido’s liquidation account, housing funds used to pay creditors, into the bank account of a private company under his control between 25 July and 9 November in 2017.
    According to ASIC, Mr Leigh then used the money for personal purposes.
    In March this year, ASIC suspended Mr Leigh’s registration as a company liquidator, after he himself fronted the regulator with an application to do so. He agreed to resign from all of his 16 current appointments, which ASIC handed to BDO Business Restructuring.
    According to ASIC, the maximum penalty for fraud is a 20-year prison sentence where the value of the fraud is at least $100,000.

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