Opes knew loan was not enough, says prosecutor
Prosecutor Greg Lyon, SC, told jurors in the dishonesty trial of Mr Smith that even a new Opes employee working from Sydney was aware the deficit was $200 million when Melbourne-based Opes Prime struck its agreement with ANZ in March 2008.
"You will note that although it will be a highlight of this case argued by the defence that there was a fog of confusion over what the position was, was it 100 or 200 million, what was it? Where was the dispute?" Dr Lyon said in his final address to the Victorian Supreme Court on Friday.
"Jen Kane [Opes legal and compliance officer], she had been there six weeks. She wasn't confused, she said it was a $200 million deficit. She saw it on the ... spreadsheet."
Dr Lyon told the court Ms Kane "couldn't see how $100 million in assistance from the ANZ Bank would solve the problem. Just bear that in mind if the defence say somehow this all eluded Mr Smith".
He told the court another witness, one-time Opes chief financial officer Tony Iremonger, had described the shortfall as "200 million, about the size of the Rudd campaign promise".
The $200 million figure is derived from problems in the account of Opes' key client, Sydney lawyer Chris Murphy, plus problems in Riqueza Holdings, a private company associated with Opes that had dozens of cash and share transactions to its sub-accounts until Opes' collapse.
Dr Lyon said the prosecution's contention was that Mr Smith "had a long lead-in to understanding the issues that confronted Riqueza in March 2008. In fact, the defence will suggest, it may be, that the events of March 2008 were rushed and confusing, particularly from Mr Smith's perspective."
He added that two witnesses from ANZ - Felicity McKinnon and Ben Steinberg - had told the court they were not aware of the existence of Riqueza until March 25, after the documents had been signed.
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, a securities lender and broker, which had more than 650 clients, collapsed in March 2008, owing creditors $631 million.
Twenty-two witnesses have been called during the five-week trial, which is being heard by Justice Simon Whelan of the Supreme Court.
Frequently Asked Questions about this Article…
The Opes Prime trial centers on former director Julian Smith, who is accused of dishonestly breaching his duties when Opes Prime struck a $95 million loan with ANZ in March 2008. Prosecutors say Smith knew the securities lender had a roughly $200 million shortfall before agreeing to the deal. Everyday investors should care because the case involves a major broker collapse that left creditors owing $631 million and affected more than 650 clients.
Julian Smith is a former director of companies in the Opes Prime group. He has pleaded not guilty to two charges of dishonestly breaching his duties as a director. Each charge carries a maximum jail term of five years.
ANZ provided a $95 million loan to Opes Prime in March 2008. The prosecution told the court that even with that $95 million, Opes Prime faced a $200 million shortfall, and witnesses said $100 million of assistance from ANZ would not have solved the problem.
The $200 million shortfall was said to result from problems in the account of a key client, Sydney lawyer Chris Murphy, and issues in Riqueza Holdings, a private company tied to Opes. Witnesses including Opes legal officer Jen Kane and former CFO Tony Iremonger described the deficit as around $200 million.
Opes Prime collapsed in March 2008 owing creditors $631 million. The business was a securities lender and broker with more than 650 clients affected by the collapse.
Prosecutor Greg Lyon SC argued that Smith had ample time to understand the issues confronting Riqueza by March 2008 and knew about the significant shortfall. The defence is expected to argue the events were rushed and confusing, but the prosecution highlighted witnesses who said the $200 million deficit was clear on company records.
Key figures mentioned in the trial include prosecutor Greg Lyon SC, Justice Simon Whelan of the Victorian Supreme Court, and witnesses such as Opes legal and compliance officer Jen Kane and former CFO Tony Iremonger. ANZ witnesses Felicity McKinnon and Ben Steinberg also testified that they were not aware of Riqueza’s existence until March 25, after documents had been signed. Twenty-two witnesses have been called during the five-week trial.
Riqueza Holdings is a private company associated with Opes Prime that had dozens of cash and share transactions across sub-accounts until the collapse. Problems in Riqueza’s accounts contributed to the prosecution’s $200 million shortfall figure, and ANZ witnesses said they only learned of Riqueza after loan documents were signed.
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