$1.3m Raine Sq transaction examined

Westgem Investments transferred $1.3 million to Saracen Properties a day before the Raine Square office development was placed into the hands of receivers, the first meeting of creditors has revealed.

Pitcher Partners managing director Bryan Hughes said the transaction was just one of many he would investigate in his role as administrator of Westgem, to which he was appointed January 11.

According to a Bankwest spokesperson, the funds were supposed to be provided to Raine Square's joint financiers, Bankwest and Bank of Scotland International.

In September last year Westgem and the financiers entered into new arrangements which required Bankwest and BOS International to provide additional funding, and for Westgem to make significant additional contributions to the project.

Bankwest said between September and December the financiers funded the project and met building costs, while Westgem failed to make any payment or contribution, resulting in the missed $50 million payment on December 31.

The spokesperson said there were a number of significant liabilities associated with the project, with the financiers owed over $330 million, the funds required to complete the project and lease obligations held by Westgem in respect to any residual Bankwest lease held on Bankwest Tower.

Westgem Investments is owned by prominent Perth developer Luke Saraceni and Hossean Pourzand.

Calls to Mr Saraceni's office by WA Business News were not returned by time of publication.

Bankwest appointed receivers from Ferrier Hodgson to a series of assets owned by companies associated with Mr Saraceni yesterday, including a vineyard near Margaret River, a shopping centre in Warrnambool and strata retail units in Spearwood.

Each company is a guarantor to the Raine Square development, and Newport Securities and Mayport Nominees have provided second mortgages to Westgem's joint financiers.

Ferrier Hodgson partner Martin Jones said tenants of the properties should not expect any disruption to their businesses, but claimed seizing the assets was an "appropriate course of action", given the circumstances.