sonray in voluntary administration, page-56

Sonray

http://www.theage.com.au/business/sonray-no-links-for-scrip-20100719-10hxf.html

ABOUT $20 million in shares belonging to clients of failed broker Sonray is in the hands of Saxo Bank but administrators are unable to match the shares to individual clients.

Saxo, which provided Sonray's trading platform, holds an additional $9 million in cash belonging to Sonray clients.

But ownership of particular assets may be almost impossible to trace because client money was pooled, administrator Ferrier Hodgson has told the Federal Court.

Control of the stock is already the subject of a legal stoush, with more than 78,000 BHP shares bought by a Sonray client frozen in a separate New South Wales Supreme Court action.

Ferrier Hodgson has been in talks with Saxo Bank to achieve a better outcome, Ian Martindale, SC, told the Federal Court on Friday.

Mr Martindale said that after 2008, Sonray struck a ''peculiar'' deal with Saxo under which it stopped transferring to the bank the money clients paid for stock.

''Financial products were purchased, in effect, on credit by Saxo Bank,'' he said. He said administrators could not ''match trades with client money'' and there had been ''removal of client funds from the segregated account for Sonray's corporate purposes''.

''In addition ? clients' accounts in some cases were simply credited or placed back in credit without any client funds being paid over by the clients.''

He said any potential deal between Ferrier Hodgson and Saxo would not ''resuscitate the company''.

The NSW Supreme Court has frozen the 78,000 BHP shares bought through Sonray by private company Efax. Orders were made on July 6 by Justice Michael Pembroke. The case has been adjourned until July 29