court stops anz sale of opes shares

THE ANZ has been ordered to stop selling shares in one of Opes Prime's companies after a Sydney judge found that the fallen stockbroker's legal agreement with clients appeared to conflict with its promotional agreement.

Although the injunction granted by NSW Supreme Court judge Patricia Bergin covers only one stock out of hundreds that are subject to an $800 million sell-down by ANZ Bank, her discovery of a possible anomaly between the agreements has possible implications for holders of all the shares.

Justice Bergin's ruling concerned Gindalbie Metals, whose stock was being sold by ANZ to recoup debts owed by collapsed stockbroker Opes Prime. Shares held by Opes, in most cases pledged against margin loans, are now under the control of ANZ bank as a secured creditor.

The injunction was sought by Melewar Steel Ventures, a Malaysian company that is the largest shareholder in Gindalbie Metals, a Perth-based iron ore explorer, with a 15 per cent stake.

She granted it on an ex parte (part heard) basis before the market opened, to stop the ANZ from selling the stock in trading yesterday.

Justice Bergin said it appeared from the evidence that there was a difference between a statement on Opes' website and the agreement for funding.

"The plaintiff has given evidence that it was reliant upon a statement on the website that equity finance, which seemingly looked like a margin loan ... and the investor retains beneficial and economic ownership of the stock with dividends, corporate transaction and market risk ... and the transaction may be reversed at any time," she said.

"That statement is not reflected in the agreement, the agreement is quite to the contrary," Justice Bergin said.

She said she disagreed with the contention by ANZ's barrister that the case by Melewar was "hopeless".

Melewar's barrister Ventry Gray told the court that the company's executive director and chief financial officer, Datuk Lim Kim Chuan, signed a Global Master Securities Agreement.

However, Melewar proceeded with the loan based on information on Opes Prime's website which said the ownership of the shares would be retained by the borrower.

The development in Sydney came as the Federal Court in Melbourne is scheduled to hear further argument today in a wider bid by the CMG group to block ANZ from dumping all of the shares it has gained from Opes.

However, during two separate hearings in the NSW Supreme Court in Sydney yesterday there was confusion as to the exact holding and location of 32 million Gindalbie shares.

It was revealed Melewar took a loan worth $11.5 million from Opes Prime in October last year, after it was referred to the collapsed Melbourne broker by a Malaysian bank.

Melewar placed 32 million shares of Gindalbie as collateral for the loan.

Gindalbie told the ASX it believed the stock -- apart from 8.5 million shares that are with ANZ -- was held in the accounts of Goldman Sachs, Merrill Lynch and German investment bank Dresdner Kleinworth, which have instructions from the Opes Prime receiver to sell the stock.

Solicitors for Melewar, Slater and Gordon, wrote to the brokers last night requesting the stock not be sold.

There is another tranche of 3million shares pledged to an Opes subsidiary, but the location of that stock is not known.

Opes Prime offered to lend Melewar up to $24 million at 1.75 per cent above the official cash rate. The financing was effectively a margin loan with the guidelines that the stock put up as collateral could be sold down to maintain a loan-to-valuation ratio of 50 per cent.

As a secured creditor, ANZ and investment bank Merrill Lynch effectively acquired control of the stock held and lent out by Opes. Opes clients have effectively been left with no control of the shares they owned that were lent out by the broker.

The injunction stopping ANZ from dumping the shares was initially granted for the duration of the trading day but was later extended to a week.

An affidavit presented to the court showed solicitors for Melewar asked ANZ on Tuesday night not to sell the Gindalbie shares when the market opened yesterday. However the bank refused and said it would proceed.

Solicitors for both Melewar and ANZ will investigate this week as to exactly where the remaining shares are.

"I'm told of the 32 million shares, 8.5 million of them are in the bank's portfolio," ANZ's barrister Robert Newlinds SC told the court.

Mr Newlinds told the court that ANZ believed the injunction could influence the market trading in Gindalbie.

Gindalbie Metals trading halted at its request on Monday.

In court yesterday, Mr Gray said the Malaysian company offered to repay the loan immediately with Opes on the basis it received its shares back.

The potential deal was not accepted by counsel for ANZ, which may apply in the next week to have the matter with Melewar transferred to become part of the broader action in Melbourne.