Opes Prime three charged

The charges are the first to be laid since the $650 million collapse of Opes Prime in March 2008, and follow an investigation by the Australian Securities and Investments Commission into funding deals used to prop up the company's embattled margin-lending business.

Emini, Smith and Blumberg each face two charges of breaching their duties as directors of listed Opes Prime Group, and a further two of breaching their duties as directors of subsidiary Opes Prime Stockbroking.

Each charge carries a maximum of five years' jail.

Central to ASIC's investigation are the guarantees the directors gave to the company's key financier, ANZ, to obtain loans shortly before Opes Prime collapsed.

The trio are alleged to have pledged Opes Prime's assets as security to meet the obligations of a private company called Leveraged Capital.

ASIC alleges that in doing so, the directors were "intentionally dishonest and failed to exercise their powers and discharge their duties in good faith in the best interests of Opes Prime Group and Opes Prime Stockbroking".

Smith and Emini were both directors of Leveraged Capital.

According to ASIC, "it is further alleged that Messrs Emini, Smith and Blumberg dishonestly used their position as directors of Opes Prime Group and Opes Prime Stockbroking with the intention of directly or indirectly gaining an advantage for themselves or for someone else".

No further action is being contemplated by ASIC against ANZ over the collapse of the stockbroking firm, which had 1200 clients.

The regulator had started investigating the roles of ANZ and Merrill Lynch in the collapse of Opes Prime, but that probe was abandoned after the banks agreed to pay Opes Prime clients a total of $253 million.

The first cheques were sent out to them just before Christmas.

Emini, the former ANZ executive who founded Opes Prime, was charged on summons last week.

Blumberg, 42, of Cheltenham, was arrested yesterday morning and appeared in the Melbourne Magistrates Court.

Smith, 47 of Wentworth Falls, NSW, was arrested on January 8 and appeared in the Downing Centre Local Court in Sydney.

All three men have been granted bail and have been ordered to appear in the Melbourne Magistrates Court on January 29. Bail conditions include the surrender of their passports, and they have been ordered not to apply for any further passports or attend any points of international departure.

Emini, 46, of Templestowe, was unavailable for comment yesterday.

Emini's lawyer, Peter Fitzgerald of law firm Oakley Thompson & Co, told BusinessDay: "Yes, I am acting for Laurie in these matters. My client and I have no comment to make on these matters now, or in the future."

Neither Blumberg, who has co-operated with ASIC's investigation, nor Smith could be reached for comment.

A FINANCIAL DEBACLE

LIRIM LAURIE EMINI

Position: Director

History: Former

financier who had

worked for ANZ

ANTHONY BLUMBERG

Position: Director

History: Worked in

banking and finance

for several big

accountancy firms

JULIAN SMITH

Position: Director

History: Stockbroker

who started in Britain

CHARGES

Each face two

charges of

breaching their

duties as directors

of listed Opes

Prime Group, and a

further two offences

of breaching their

duties as directors

of subsidiary

Opes Prime

Stockbroking. Each

charge carries a

maximum of five

years jail.

Stockbroking

company Opes

Prime collapsed

in March 2008

owing $650 million

four years after

opening its doors.

The 640 creditors

last month received

30? of what is

expected to be a

total distribution of

37? in the dollar.

Administrators

have warned final

resolution may take

up to two years.