Pyramid Chief Fined $50,000
Sydney Morning Herald
Friday November 10, 1995
The former chief executive of the Pyramid Building Society, Mr Bill Farrow, was convicted and fined $50,000 yesterday for exceeding unsecured loan limits in the Farrow group of building societies.
The Geelong magistrate, Mr David McLennan, said that Mr Farrow had breached his fiduciary duty and the position of trust he held as a director of the building societies.
"What happened here amounted to a risk to considerable portions of the funds of the societies and that risk was totally unjustifiable," Mr McLennan said.
Mr Farrow had earlier pleaded not guilty to 10 charges of breaching the now-obsolete 1986 Building Societies Act. Five other counts were withdrawn. Mr Farrow, who represented himself, was ordered to pay a $5,000 fine on each charge after Mr McLennan told the court that while Mr Farrow's offences were not the "worst case" the courts had seen, they were "bad enough". The charges carried a maximum fine of $10,000 each.
Mr McLennan also awarded $70,000 in legal costs against Mr Farrow. Mr Farrow said that he would be able to pay the fine in monthly instalments of $2,000 and added that he did not want his friends to pay for him. The costs awarded against Mr Farrow will be added to the list of creditors claiming from his bankrupt estate.
The charges, laid by the former registrar of building societies, Mr David LaFranchi, claimed societies within the Farrow group lent more than the statutory limit of 6 per cent of its assets in unsecured loans. The offences, involving up to $100 million, occurred between June 1989 and April 1990 and involved the Pyramid, Geelong, Federation and Countrywide societies.
Outside court, Mr Farrow said there was no connection between the charges and the $1 billion worth of losses suffered by the Farrow group. "If I have acted improperly in any way on any issue, I apologise."
© 1995 Sydney Morning Herald
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