From "The Australian":
Blumberg stands by claims of Opes fraud
Richard Gluyas | June 06, 2008
FORMER Opes Prime director Anthony Blumberg has accused ANZ of trying to "smear" him, standing by allegations made in a statutory declaration that he warned the bank, before it agreed to $95 million in emergency funding, that there had been fraud inside Opes.
Mr Blumberg agreed yesterday that he had retracted the fraud allegations in a March 22 letter to ANZ executive Ben Steinberg, but said the subsequent statutory declaration, sworn on May 5 for Opes administrator John Lindholm, was the true version of events.
Opes, a Melbourne-based stockbroker, margin lender and stock lender, went into administration on March 27. "The bottom line is that I'm probably facing insolvency and civil proceedings, so you don't swear a stat dec lightly in that context," he told The Australian last night.
"If what's in there is untrue, it could lead to perjury charges."
Mr Blumberg described the Opes debacle as "all-consuming, all-encompassing and terribly depressing", and it probably meant that he "can't earn a crust doing what I did before".
He said his Channel Islands-based father had lost $23 million of stock deposited with Hawkswood Investments that had "disappeared" in the ensuing collapse.
Hawkswood, now in liquidation, was an equal joint venture between the three Opes founders -- Mr Blumberg, Julian Smith and chief executive Laurie Emini.
Mr Blumberg rejected any aspersions cast on his father over his tax-haven domicile, saying he had lived there for 25 years.
However, Mr Blumberg conceded that he was at risk of an Australian Securities & Investments Commission civil case, possibly over insolvent trading, breach of directors' duties or false and improper accounting.
"At the end of the day, ASIC will make up its own mind about that; they have everything they need out of the business," Mr Blumberg said. "Ultimately I will have to see what is alleged, so it is just conjecture at this stage."
Apart from warning ANZ about fraud inside Opes, the other core allegation in Mr Blumberg's statement of claim is that he warned ANZ's Mr Steinberg that $95 million in emergency funding would not be enough to save the group.
He says in the document that he told Mr Steinberg that Opes had a $200 million "hole" in it.
This helps Opes administrator John Lindholm in his bid to extract a higher contribution from ANZ in mediation negotiations now under way.
If Mr Lindholm can show that ANZ improved its security position in return for handing over the $95 million, knowing that Opes was still likely to collapse, then the security could be attacked as a preference payment, boosting returns to unsecured creditors.
ANZ has made it clear it disagrees with Mr Blumberg's version of events, describing his contradictory statements as "puzzling".
The bank has noted that Mr Blumberg's letter to Mr Steinberg, in which he retracts the fraud allegations to clear the path for the $95 million funding line, is an attachment to a statutory declaration in which he reinstates the same allegations.
An ANZ spokesman has said the bank's view was that Mr Blumberg's "primary issue of concern" was the personal guarantees he had provided, from which he obtained a release after he withdrew his allegations of fraud inside the broker.
Mr Blumberg denied yesterday that his actions were motivated by his personal financial position, or that of his father.
"If that were the case, I would have asked for a release from the $16 million loan I had from Leveraged Capital (an investment vehicle owned equally by Smith and Emini interests)," he said.
"I didn't do that. The thought never occurred to me. Things were happening so quickly at the time."
Mr Blumberg said the reason he provided the letter to ANZ in which he retracted the fraud allegations was that Mr Steinberg had said Opes's problems had to be dealt with one at a time.
The first problem that had to be resolved was the decision by mining entrepreneur and Opes client Norm Seckold to reclaim $95 million worth of his securities that were held by ANZ, when Opes had no available cash to hand over to the bank in return.
"It made sense at the time, but it was a high-pressure time and it might not have been the right decision," Mr Blumberg said.
"ANZ's lawyers wrote the letter, I got advice from my lawyer and I signed it.
"I should have known that ANZ would try and smear me -- that that would be an option they might take.
"I think it is going that way now. I do not think they like it that the stat dec has got out."
An ANZ spokesman said he had no comment on Mr Blumberg's allegation that the bank was smearing him.
The former director said he was a $16 million debtor to Leveraged Capital and not an Opes creditor.
Mr Blumberg said Opes's receiver, the accounting firm Deloitte, had sent him a letter asking him to deposit the funds he owed in a specified bank account.
Asked if he had $16 million, Mr Blumberg said: "No, nothing like it."
As to Mr Emini, with whom he had had no contact since the Opes collapse, he said he was unsure how he felt about his former business partner.
"It's an interesting question," he said.
"I feel numb. We were three weeks away from a $48 million listing. That's a massive turnaround."
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