letters of demand sent to opes clinets, page-46

Deloitte leans on Opes clients
Michael West
December 10, 2008 - 3:23PM

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Stewart Dann is a doctor and one of the Opes Prime clients unlucky enough to have a large share portfolio - not to mention his super fund shares - sitting in Opes Prime when the stock lender bit the dust in late March this year.

Yesterday Dann received a letter of demand from ANZ's insolvency henchmen from Deloitte telling him to stump up $1 million by next week.

Deloitte is pursuing 223 clients for a total of $228 million.

"I'm trying to work out what their motives are,'' says Dann. "Are they trying to soften everyone up for a settlement?''

"Where's the regulator?'' he asks. Good question - gone to ground. Opes collapsed on March 27. Administrators and receivers were promptly appointed and in the ensuing days and months Opes' bankers, Merrill Lynch and ANZ, dumped the stock into the market to protect their positions.

Not content with simply selling the stock though, some of which was held by Opes clients' super funds and therefore could not be borrowed against anyway, ANZ is now demanding they repay the debt as well - debt against stock they used to own and never had the opportunity to sell.

On March 27 when Opes went under, Dann had loans of $7 million on a portfolio of shares worth $15 million. He also had a superannuation account with $1 million worth of shares and no debt.

ANZ and Merrill rely on the AMLSAs (stock lending agreements which Opes had with its bankers where ownership of the shares passed to the macro lender) to justify their seizure and sale of the Opes client stock.

Like many other Opes clients allied to one of the three class actions - IMF, Sweeney Commercial Lawyers and Slater & Gordon - Dann relies on other Opes documentation, including a 2004 Financial Services guide, which says he had beneficial ownership of the shares.

Extortion claim

Dann doesn't mince words when expressing his view of what happened. "They (the banks) have taken dodgy security (over Opes) in order to get themselves in a position where they could take my shares and now they are trying to extort more money from me.''

"Once a debt is fully repaid by the sale of the shares, regardless of the fact that they haven't returned any surplus funds from the sale to you, they come at you again ... for more money. So you either have to pay or they sue you''.

The security Dann refers to is the move by ANZ in the days before Opes collapsed to lend the sinking broker more money in return for co-operation from its directors and a secured charge over the business. It was an exercise in a bank "perfecting its security''.

Whether the AMSLAs hold up or not under legal challenge, the eleventh-hour charge is yet to be dealt with by the courts and usually a charge taken within six months of insolvency is rendered void.

"To suddenly tell me that I have until December 15 to pay them an extra $1 million ... something is very, very crook,'' says Dann.

In issuing its letter of demand, Deloitte cites the decision of Justice Finklestein in the Federal Court who found in mid-October that the AMSLAs would be closed out on liquidation. Opes was put into liquidation on October 15.

The Deloitte notice of demand reads:

"Liquidation and Effect on Client Accounts: You may now have read in the media or been notified by Ferrier Hodgson that on 15 October 2008 Ferrier Hodgson, the Voluntary Administrators of Opes, were appointed Liquidators of Opes. The significance of the appointment of Liquidators to Opes is that there was automatically an event of default under the SLBA (Securities Lending and Borrowing Agreement)''. Continued…