Prosecution says Opes Prime knew loan was not enough

Former Opes Prime director Julian Smith knew the securities lender had a shortfall of $200 million when he agreed to a $95 million loan from ANZ, a court has been told.

Former Opes Prime director Julian Smith knew the securities lender had a shortfall of $200 million when he agreed to a $95 million loan from ANZ, a court has been told.

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.

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