Opes chief honest, court told
Defence counsel Mark Regan said the dishonesty trial of Mr Smith was not a royal commission into the Opes Prime collapse and urged jurors to "try, if at all possible, to put yourself in Mr Smith's shoes".
Mr Regan told the Victorian Supreme Court on Tuesday that "when it's peeled apart factually ... the contentions or the amount of knowledge that the prosecution say that Mr Smith did have, it won't bear out."
Mr Smith has pleaded not guilty to two charges of dishonestly breaching his duties as director of companies in the Opes Prime group. Each charge carries a maximum jail term of five years.
Opes Prime, which had more than 650 clients, collapsed in March 2008 owing creditors about $630 million.
Mr Regan told the court the evidence will show in the lead-up to signing the lifeline deal with ANZ, that Mr Smith took "reasonable and appropriate steps based on the information that was available to him".
This included going to lawyers Hall & Wilcox, rather than "jumping on a plane to South Africa", he said.
"We say that they [Mr Smith and fellow director Anthony Blumberg] were taking what they regarded to be the prudent steps in the circumstances, consulting lawyers and so forth. We say that that mitigates against dishonesty in this case. It's as simple as that," Mr Regan said.
"The honest director, in the shoes of Mr Smith, signed the co-operation deed as a lifeline."
The Australian Securities and Investments Commission alleges that as Opes Prime teetered on the brink of collapse in March 2008, Mr Smith wrongly pledged assets belonging to two Opes Prime companies in order to secure the $95 million loan to Leveraged Capital, a company associated with Mr Smith and fellow director Laurie Emini.
The trial, before Victorian Supreme Court judge Simon Whelan, continues.
Frequently Asked Questions about this Article…
The trial concerns director Julian Smith, who has pleaded not guilty to two charges that he dishonestly breached his duties as a director of companies in the Opes Prime group. The charges relate to events around the firm’s collapse in March 2008 and whether Mr Smith improperly pledged assets to secure a loan.
ASIC alleges that as Opes Prime teetered on the brink of collapse in March 2008, Julian Smith wrongly pledged assets belonging to two Opes Prime companies to secure a $95 million loan to Leveraged Capital, a company associated with Mr Smith and fellow director Laurie Emini.
The case involves Opes Prime, ANZ (the bank involved in the $95 million deal), Leveraged Capital, and law firm Hall & Wilcox. Key individuals named include director Julian Smith, fellow director Anthony Blumberg, Laurie Emini, defence counsel Mark Regan, and Victorian Supreme Court judge Simon Whelan. ASIC is the regulator bringing the allegations.
The $95 million deal with ANZ was described in court as a lifeline or cooperation deed signed during Opes Prime’s final days. ASIC says the loan was secured using assets of Opes Prime companies, while the defence argues the deed was signed honestly as an attempt to keep the business afloat.
Defence counsel Mark Regan told the Victorian Supreme Court that Mr Smith acted honestly and took reasonable, appropriate steps based on the information available. The defence says Mr Smith and fellow director Anthony Blumberg consulted lawyers (Hall & Wilcox) and believed they were taking prudent steps, which mitigates against dishonesty.
Opes Prime collapsed in March 2008. According to the article, the securities lender and broker had more than 650 clients and collapsed owing creditors about $630 million.
Each of the two charges against Julian Smith carries a maximum jail term of five years. Mr Smith has pleaded not guilty and the matter is being determined in court.
The trial is ongoing in the Victorian Supreme Court before Judge Simon Whelan. Defence opening remarks have focused on the claim Mr Smith acted honestly; ASIC’s allegations are being tested in court. Everyday investors following the case should watch for witness evidence and the court’s findings on whether assets were wrongly pledged and whether directors breached their duties.
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