The former chief executive of collapsed Perth pub company Compass Hotel Group has appeared in a Sydney Court after being charged over a deal that saw him allegedly siphon more than $1.5 million in hotel broker commissions into his own private company.
Bryan Raymond Northcote, who now lives in Sydney, was formerly the chief executive of Compass Hotel Group, which was listed on the ASX until it was placed in the hands of receivers in March 2011 with debts of more than $100 million.
ASIC alleges that between October 2007 and April 2008 a private company owned and controlled by Northcote formed an agreement with a hotel broker whereby Northcote’s firm would receive 50% of the sales commissions paid by Compass Hotel Group and vendors on hotels that Compass was buying for its portfolio.
ASIC claims Northcote’s company received $1.566 million in commissions, which the board of Compass were not aware of.
ASIC has charged Northcote with three counts of breaching his directors’ duties and providing false and misleading information to the Compass board.
ASIC alleges that Northcote submitted misleading documents to ASIC claiming that he had resigned from his private company on October 1, 2007, when in fact he had not.
Northcote appeared yesterday in the Downing Centre Local Court in Sydney. He was not required to enter a plea and the matter will return to court on December 4.
Northcote faces up to five years imprisonment for each breach of directors’ duties, while submitting false or misleading documents to ASIC carries the same maximum penalty.
Woolworths-backed pub group ALH bought the 12 Perth pubs owned by Compass in September 2011 for $86 million.