Opes Prime clashed with ANZ over lending deal
The comment was made at the trial of Mr Smith. Opes Prime, a securities lender and broker, which had more than 650 clients, collapsed in March 2008, owing creditors $631 million.
The ANZ head of lending services for corporate banking, Ben Steinberg, said Mr Smith had expressed doubt that anyone in the market would accept proposed changes to the way the bank determined who owed what to whom once a lending agreement ended.
The changes meant shares lodged by Opes with the bank would be valued at the price they could be sold for, rather than their last closing price.
Mr Steinberg told the Victorian Supreme Court on Monday he decided to respond to Mr Smith's "aggression" by telling him in a March 2008 meeting that ANZ had the option of no longer receiving stock from Opes.
"Mr Smith then indicated that he hadn't not agreed to anything, so there was a slight change in Mr Smith's attitude, and he again suggested he would take - or he suggested then that he would take our proposals, once we put them in writing, to ... Opes Prime for consideration," Mr Steinberg said.
The prosecution says as Opes Prime teetered on the brink of collapse, Mr Smith wrongly pledged assets in order to secure a loan from ANZ to Leveraged Capital, a company associated with Mr Smith and Opes CEO Lirim "Laurie" Emini.
The trial continues.
Frequently Asked Questions about this Article…
According to the article, Opes Prime, a securities lender and broker with more than 650 clients, collapsed in March 2008 and owed creditors $631 million.
The article says ANZ proposed changes to the lending agreement that would change how shares lodged by Opes Prime were valued at the end of the agreement — valuing them at the price they could be sold for rather than their last closing price — and Opes Prime director Julian Smith strongly objected.
Valuing shares at the price they could be sold for (market sale value) can result in a lower valuation than the last closing price in stressed markets, which affects the amount recovered against loans; the article highlights this valuation change as a key point of disagreement between Opes Prime and ANZ.
The article identifies Ben Steinberg as ANZ’s head of lending services for corporate banking; he told the Victorian Supreme Court he responded to Julian Smith’s objections in a March 2008 meeting and said ANZ had the option to stop receiving stock from Opes Prime.
According to ANZ’s account in the article, Julian Smith initially expressed doubt the market would accept ANZ’s proposed changes, but then indicated he hadn’t agreed to anything and suggested he would consider ANZ’s written proposals once they were put forward.
The article states the prosecution alleges that as Opes Prime neared collapse, Julian Smith wrongly pledged assets to secure a loan from ANZ to Leveraged Capital, a company associated with Smith and Opes CEO Lirim 'Laurie' Emini.
The article reports that Leveraged Capital is a company associated with Julian Smith and Opes Prime CEO Lirim 'Laurie' Emini, and that the prosecution alleges a loan from ANZ to Leveraged Capital was involved in the pledging of assets.
The article says the trial of former Opes Prime director Julian Smith is continuing in the Victorian Supreme Court.
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