director puts opes spotlight on anz

From "The Australian":

Director puts Opes spotlight on ANZ

Katherine Jimenez | June 11, 2008

A SECOND Opes Prime director has turned the spotlight on ANZ Bank, with Julian Smith claiming the bank was "pretty clear" about the issues facing the collapsed stock-lending firm at a major meeting between Opes and ANZ on March 19.

His comments come as receivers Deloitte are likely to initiate writs this week against co-founder Laurie Emini, fellow director Anthony Blumberg (who has already taken aim at ANZ over its putting funds into Opes after being warned of major problems there) and Mr Smith for alleged breaches of directors' duties.

In his first major interview since Opes collapsed on March 27, Mr Smith told The Australian yesterday that the March 19 meeting discussed "the nature of the issues that we had discovered within Opes Prime".

"There were problems associated with the accounts of three clients," he said, while confirming that the two problem accounts involved Sydney lawyer Chris Murphy and British Virgin Islands company Riqueza. Also, mining entrepreneur Norm Seckold had deposited about $95 million worth of shares with Opes and wanted them back.

"The nature of the issues was pretty clear," Mr Smith said.

That meeting was attended by ANZ executives, the bank's lawyer Minter Ellison, administrator John Lindholm and Mr Blumberg.

Mr Smith's comments put the spotlight on how much ANZ knew when it entered into a $95million loan with Opes, which was agreed to on March 19 and signed off on March 20. It also comes as administrator John Lindholm attempts mediation talks with ANZ.

In a sworn statutory declaration obtained by The Australian last week, Mr Blumberg said he signed a document in March in which he withdrew his allegations of fraud inside Opes in response to ANZ's demands, to smooth the way for the bank to proceed with a $95 million loan about a week before Opes collapsed.

Mr Smith said yesterday: "They (ANZ) were aware at the first meeting what the situation was. We had explained it to them. They (ANZ) then took measures that they said were to ensure continued survival of the company."

Asked if he believed ANZ tried to shore up its position in the days leading up to the collapse of Opes, he said: "Well, as a matter of actual fact, that is what happened. I don't think the ANZ or anybody else would deny that."

Opes collapsed on March 27 after ANZ withdrew its support from the company when its forensic investigators discovered accounting irregularities prevented margin calls on certain client accounts.

Mr Emini, who has dropped out of sight, allegedly manipulated some client accounts to avoid margin calls.

The Australian understands Deloitte is preparing to issue a writ against Mr Blumberg alleging that he had breached his director's duties. It is understood writs will also be issued against Mr Smith and Mr Emini.

The receivers will allege that Mr Blumberg arranged unsecured loans by Opes to entities related to him, including Wescorp Pty Ltd, 257 Bay Road Pty Ltd, a company that owns his home, Conquest Racing and Admiralty Resources.

Deloitte will also allege that Mr Blumberg was involved in false and improper accounting, potential double recording of transactions in listed stocks between Hawkswood and Opes Prime Stockbroking, and suspected provision of false information to an auditor.

A spokesman for Mr Blumberg said last night that "anything that they put to him, he will fight vigorously".

Asked if he took any responsibility for what happened atOpes, Mr Smith said: "Clearly, any director of a company that collapses under whatever circumstances has some obligations."