The Independent Commission Against Corruption began public hearings yesterday in Operation Verdi, its inquiry into the circumstances in which Mr Cassidy’s long-term business partner Darrell Hendry bought the Armidale hotel for $2.65 million in 2005.

Counsel assisting the inquiry, Anna Mitchelmore, alleged Mr Cassidy misled the university about his dealings with Mr Hendry over the sale of the hotel and his own investment in it.

The inquiry will investigate whether Mr Cassidy’s dealings amounted to misconduct in public office.

Mr Cassidy, the former head of construction giant Abigroup, allegedly called Mr Hendry “out of the blue” in November 2005 and suggested he “take a look at the Tattersalls Hotel” in the Armidale CBD. 

There was an implicit understanding Mr Cassidy would act as a partner in any investment, the ICAC heard.

Mr Cassidy had obtained a valuation of the hotel commissioned by the university and believed the $2.35 million figure was “too low”, the inquiry heard.

“One of the purposes of this inquiry is to investigate whether, and if so to what extent, Mr Cassidy made use of his knowledge of his valuation in joining Mr Hendry in the purchase of the hotel,” Ms Mitchelmore said.

Mr Cassidy subsequently obtained inside information the rival bidders had offered between $2.2 million and 

$2.5 million for the hotel. On December 5, 2005, Mr Hendry’s $2.65 million bid was accepted by the university.

The minutes of a December 5 meeting of the Services UNE board, which considered the tenders, recorded Mr Cassidy telling one of the board’s directors that he had “no ongoing connection with Mr Hendry”.

Mr Cassidy and Mr Hendry allegedly negotiated the former’s stake in the investment in December but it was not until January 20, 2006, that the then-UNE chancellor told the acting vice-chancellor that he had decided “as of the day before” to invest in the hotel.