BANKING COMMISSION: Owner-builder Peter Comino (left) and Paul Mills discuss the features and finishes of his apartment development in Bolsover St before the banks forced him to sell his assets. Mr Comino is calling for a broader royal commission.
BANKING COMMISSION: Owner-builder Peter Comino (left) and Paul Mills discuss the features and finishes of his apartment development in Bolsover St before the banks forced him to sell his assets. Mr Comino is calling for a broader royal commission. TAMARA MACKENZIE.

Rocky businessman: Commission needs to look wider than banks

A ROCKHAMPTON man who claims his bank cost him his $14 million property portfolio believes the banking royal commission won't make significant findings if its terms of reference are not expanded.

Peter Comino has a personal stake in calls for the inquiry to be broadened, but his lack of faith in terms of reference dictated by the "big four banks'' has been echoed at the highest levels of the Federal Government in recent weeks.

Mr Comino lost his life's work in the wake of the Global Financial Crisis in 2008 when he claims his bank "panicked" and pulled their support for his high-rise boutique apartment complex and coffee shop in the Rockhampton CBD.

It was part of the $14 million property portfolio he said he lost as the bank forced the sale of his assets, systemically pushing him into bankruptcy.

"In my case all receivers and managers, including forensic accountants, deliberately turned a blind eye to the law and illicit trading practices," Mr Comino said.

Banking royal commission hearings in late June focused on the rushed mortgagee sales of farmland by bank-appointed receivers, where some properties were sold for 30 to 50 per cent below their value.

The commission stated the conduct of receivers would not be assessed as it did not fall within any of the categories defined as a financial services entity.

 

CBD Apartments
CBD Apartments Allan Reinikka ROK080618acbdapar

However, Treasurer Scott Morrison later seemed at odds with this statement, telling Parliament Question Time that receivers would come under scrutiny from the royal commission.

There has been no clarification about whether the scope of the inquiry will be broadened to include prudential legislation and entities, like receivers, acting on behalf of banks.

This week, it was reported One Nation Senator Pauline Hanson had written to the Prime Minister calling for the commission to be extended, arguing the inquiry had failed to look into relationships between banks, receivers, liquidators and insolvency firms.

Although the focus of this latest outrage has been centred on fire sales of agricultural land, there are parallels between the experiences of agricultural borrowers and Mr Comino.

Mr Comino, who detailed his "financial homicide" to The Morning Bulletin last month, said he had "never been more aggrieved" than watching ANZ head of lending services Benjamin Steinberg testify at the royal commission.

With the support of Member for Flynn Ken O'Dowd and Senator John Williams, Mr Comino met with Mr Steinberg to discuss his grievances with ANZ in the wake of the property sales, but nothing came of it.

Mr Comino said Mr Steinberg told him the grievances should be directed to the appointed receivers rather than ANZ.

Failure to achieve fair and true value of the properties is one of Mr Comino's biggest concerns with the bank's conduct, and an issue which evidence at the royal commission suggests is systemic in the finance industry.

"The receivers are a lot to blame in the banks' failure to receive a full market value," he said.

"However, they are still colluding and collaborating with the banks to accept final sale prices without fair agreement of the vendor."

In Mr Comino's case, properties were poorly presented and development approval information which would have added value and broadened interest were excluded from marketing campaigns.

 

CBD Apartments
CBD Apartments Allan Reinikka ROK080618acbdapar

While Mr Comino said he understood his financial agreement with the bank required him to sell his assets if instructed by them, ANZ also had a duty to abide by the Corporations Act and Financial Services Act.

When forced to sell his assets, Mr Comino presented the bank with all written offers in good faith, trusting them to follow correct lending practices.

One of these was a simultaneous offer to sell the CBD Executive Apartments with $3.3 million cash and buy development land at Mackay Harbour with an existing Development Approval for $1.2 million.

Mr Comino said this contract meant ANZ in forcing him to sell one property was also financing him for the purchase of a non-income producing property plus approximately $50,000 in stamp duty and fees.

"I know the bank progressed a sale that was not economically viable for myself or the bank because they were desperate for money," he said.

Mr Comino said the bank stripped him of his lending facilities and cash flow two days after approving the $1.2 million loan to acquire the Mackay property.

The bank then imposed high default interest rates on the $1.2 million property.

There were also issues with the sales of Mr Comino's other property assets.

He claims the bank allowed receivers and agents to sell these other properties without disclosing their full and existing development approvals.

Mr Comino believes this "totally misrepresented their true value".

He said the bank spent more time drawing up a Deed of Agreement designed to give themselves immunity, rather than performing the due diligence and complying with statute laws.

"The other root causes are valuations for bank purposes," Mr Comino said.

"It gives banks a lot of preference and ability to get their own desired outcome without consideration of the client.

"Valuations for bank purposes compared to a normal valuation can be miles apart.

"It destroys the ability for the owner of the property to achieve a fair and reasonable sale."

Inflated valuations have been explored by the inquiry. One western Queensland farmer told the commission a new loan to refinance his two cattle properties based on an incorrect valuation resulted in financial disaster.

Mr Comino has made a submission to the royal commission, but he believes there is little chance he will be invited to give evidence.

"At present there's something like 7337 claims, about 65 per cent of those were relating to banking misconduct," he said.

"However, only 16 cases have been invited to make a representation at the inquiry."

Regardless, he feels some sense of vindication in seeing strong evidence of systemic misconduct of banks and receivers revealed by the latest royal commission hearings.

He believes there are many more people with similar stories nation-wide who may not have the will or financial literacy to continue fighting for compensation.

"The royal commission cannot be the terms of reference suggested by the banks and must include prudential regulation," Mr Comino said.

"It is a complete and utter farce that the banks are dictating these terms and it's all smoke and mirrors.

"Banks cannot self-regulate any longer and need full and clear disclosures of products to the public.

"Financial literacy will mean nothing without honest details of fees, charges, trailing commissions and risk."

An ANZ spokesman previously told The Morning Bulletin the bank did not comment on specifics of individual customers' banking details.

"ANZ does not believe it has a case to answer in this matter and totally rejects the customer's allegations," he said.