Opes Report Reveals Anz Sale Shortfall
Sydney Morning Herald
Saturday April 26, 2008
ANZ Bank's controversial sale of a $920 million share portfolio from the Opes Prime collapse is not expected to recover the $550 million worth of loans that the bank provided on the stock, a report from Opes administrators has revealed.The shortfall was among a number of revelations contained in a report to creditors released late on Thursday. It also said Riqueza, the company in the British Virgin Islands that is believed to be central to the Opes collapse, "may have been controlled by" Opes founders Laurie Emini and Julian Smith.Both have surrendered their passports and have agreed not to travel overseas while investigations continue into the group's collapse by parties that include the Australian Securities and Investments Commission.The reports contained no change to the estimated return to unsecured Opes creditors of "up to 30 cents in the dollar".In relation to the margin loan agreements covering the $550 million loan to Opes, the report said: "ANZ has advised that, according to its calculations, close out of those [agreements] may result in a shortfall to the ANZ." The predicted shortfall reflects the decline in the value of the share portfolio after recent market falls. ANZ is owed $650 million, including a $95 million loan offered to Opes just before its collapse. The loan was offered in return for a secured charge over the assets of various Opes-related companies that could be used to recover the share sale shortfall.The transaction is one of many being investigated by the administrators, led by Ferrier Hodgson's John Lindholm. "We are currently seeking legal advice in relation to the registration and validity of two charges," the administrators said in reference to the ANZ charge and one from fellow Opes financier Merrill Lynch.Receivers acting on ANZ's behalf to recover $650 million in loans are finalising account statements for clients who owe Opes money as a result of trading losses and said they will serve demands on the clients shortly. A previous report to creditors said "normal" debtors owed $24 million and "problem" accounts totalled $128 million. This is believed to include Sydney lawyer Chris Murphy.Mr Murphy has disputed any liability from the Opes collapse, arguing the company was responsible for any losses once it decided not to trigger a margin call against his accounts. "At the point where my equity got to nil, from that point on, it became their position," he told the Herald recently. Account manipulations which hid the margin calls on the "problem" accounts go to the heart of the group's collapse. The report also hinted at a potential conflict between the receivers - working for ANZ - and the administrators, who act for Opes creditors. The administrators noted that the problem accounts were transferred to Opes Prime Group Securities (OPGS), which comes under their control and not that of the receivers, "as ANZ did not hold a charge over OPGS".The administrators said ANZ's receivers, Deloitte, have claimed the "problem" accounts as an asset of another company in the group which is under their control - Opes Prime Stockbroking - "and, we are advised, are finalising account statements such that demands will be served on those clients shortly".The report also reveals that Opes was still planning its $100 million initial public offering the day the administrators walked in the door, even though two directors, Alun Stevens and the newly appointed chairman, Peter Gillooly, had walked out on March 18 when Opes directors became aware of the "irregular transactions" that sent the company into administration later that month. The administrators have asked the two directors to "advise in writing their reasons for resigning".The administrators are reviewing a number of courses of action. Liquidation would give them powers to undo transactions leading up to the collapse and take action against the directors if the company was trading while insolvent.