DARRELL Hendry used to joke with his long-term business associate John Cassidy, the former chancellor of the University of New England, that he’d “buy a pub” when he retired.
Now a deal in which the pair bought the university-owned Tattersalls Hotel in Armidale is at the centre of an inquiry by the Independent Commission Against Corruption.
Yesterday, Mr Hendry gave evidence that Mr Cassidy called him in November 2005 and told him to “have a look” at the art deco hotel, on the main street in the Armidale CBD, because “he thought it would be a good investment”.
“I can recall saying to John, ‘What’s a university doing owning a pub?’” Mr Hendry said.
The ICAC is investigating allegations that Mr Cassidy, the former boss of construction giant Abigroup, acquired inside information about the sale of the hotel in the course of his official functions as chancellor and used that information “for the benefit of himself and Mr Hendry”.
The allegations at the centre of the ICAC’s investigation were the subject of a Fairfax Media investigation last year.
Mr Hendry told the inquiry that Mr Cassidy did not tell him anything about the potential price, although the inquiry has heard the then-chancellor had obtained a university-commissioned valuation that put the hotel’s value at $2.35 million.
Mr Hendry, a former financial director of Abigroup, said he had never been involved in hotels and agreed that in terms of location it was a “more convenient investment” for Mr Cassidy than for him.
Asked if he thought Mr Cassidy would be one of the partners, Mr Hendry said it was “all too early for that” but his “reading of the situation, rightly or wrongly, was if I wanted partners, John was going to be an ideal partner for this hotel”.
“It seemed to me logical that he would be interested in being a partner,” he said.
Under questioning by Commissioner Megan Latham, he admitted he did not approach anyone else to be a partner in the investment.
The ICAC has heard Mr Cassidy obtained inside information in November 2005 that rival bidders for the hotel were willing to pay between $2.2 million and $2.5 million.
On December 5, 2005, Mr Hendry’s $2.65 million bid – in his name only – was accepted by the university and contracts were exchanged the next day.
The minutes of a December 5 meeting of the board of Services UNE, which considered the tenders, recorded that Mr Cassidy told one of the board’s directors, Roderick Watt, that he had “no ongoing connection with Mr Hendry”.
Mr Cassidy and Mr Hendry 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. Counsel assisting the inquiry, Anna Mitchelmore, has alleged Mr Cassidy’s statements to the university were misleading. The commission is examining whether Mr Cassidy’s conduct amounted to misconduct.