Notorious Melbourne property spruiker Henry Kaye is facing a showdown with the corporate watchdog as he seeks to regain control of two of his companies.
Last week Kaye began proceedings in the Supreme Court to be reinstated to two of his companies, an application that will be opposed by ASIC lawyer Peter Paleologos, the Herald Sun reported.
Palegologos told the court he wanted to raise “issues of commercial morality” when Kaye’s application is heard next month.
Kaye gained notoriety in the early 2000s for claims he made in investment seminars that he could turn ordinary Australians into millionaires and convincing thousands of mum and dad investors to invest in his property schemes.
Attendees at Kaye’s free seminars were convinced to spend $15,000 in a property investment education course, with promises that they could get rich quickly by buying property without a deposit.
The practices of Kaye were brought to public attention by real estate consumer advocate Neil Jenman, who spoke out against Kaye.
The Age reported in December 2003 that Jenman had refined his attack on Kaye to the mantra-like “Stay away from Henry Kaye. He creates pain.”
Kaye challenged Jenman to a public debate at the time, but Jenman said he would only debate him in a court – at the time Kaye was under investigation by three corporate watchdogs.
In 2003 The Age reported Kaye or someone in his company employed a private investigator to dig into Jenman’s professional and personal life, including contacting estate agents and members of Jenman’s family.
Jenman said this was an indication of how desperate Kaye had become as his property empire unravelled.
Kaye’s National Investment Institute collapsed in 2003 owing 3,500 investors up to $60 million.
In 2004, Richard Cauchi, the liquidator of a company associated with Kaye, described the 120-company Kaye empire as “a washing machine of money”.
In 2005 Kaye dropped his appeal against a Federal Court finding that he had breached the Trade Practices Act in promoting his “millionaires” property seminars.
In 2010 Kaye was disqualified from managing corporations for five years by ASIC following his involvement in 26 failed companies that provided suspect investment and property education services to the public.
Download the free Property Observer eBook Residential Property Investment Amid Queensland’s Resources Boom. This article first appeared on Property Observer.