One-time Opes Prime chief executive Lirim "Laurie" Emini has told a court he did not tell key colleagues, including fellow director Julian Smith, that he was double counting securities before the broker and securities lender's collapse.
Giving evidence in the trial of Mr Smith, Mr Emini told defence counsel Mark Regan the cash and securities transfers - covering two positions with the same stock - were done during a stressful time.
"I mean, obviously the [Sydney lawyer Chris] Murphy account was one, but there was other clients in margin call as well," Mr Emini told the Victorian Supreme Court on Tuesday. "We were going through a phase of change, so I just did what was simple ... what I knew, and what I knew was to deal with one account and then another and that at the same time collateralise that through another entity."
Mr Smith has pleaded not guilty to two charges of dishonestly breaching his duties as director of companies in the Opes Prime group. It collapsed in 2008 owing creditors about $630 million.
Under cross-examination, Mr Emini agreed he was the "relationships guy" at the firm, and he alone had a relationship with the mining identity Norm Seckold, whose shares were used to cover positions elsewhere in the firm.
Questioned by Mr Regan whether he had told Mr Smith in 2006 that Mr Seckold's account "might possibly be used for short-term liquidity funding", Mr Emini said he couldn't recall. But he told jurors that under the securities lending agreement, Leveraged Capital - a company associated with Mr Smith and Mr Emini - had "the right to do whatever we want with stock".
Mr Emini agreed Mr Smith was not included on the key email in December 2007 detailing a $20 million shortfall in Mr Murphy's accounts. The court was told this week that on learning of the shortfall, Mr Emini started using directors' shares and cash to prop up Mr Murphy's accounts. He said he did not hide this from fellow directors Mr Smith and Anthony Blumberg.
The prosecution alleges that as Opes Prime teetered on the brink of collapse, Mr Smith wrongly pledged assets belonging to two Opes Prime companies in order to secure a $95 million loan from ANZ to Leveraged Capital.