Bell banks made up evidence: QC

  By Neale Prior

BELL Group liquidator Tony Woodings has upped the ante in the collapsed group's legal action against its former banks, accusing them of fraud and creating minutes for board meetings that had not yet happened.

  Ross Robson QC, for Mr Woodings, told the Supreme Court yesterday that the banks had their lawyers prepare the minutes as part of a scheme in January 1990 for the banks to get security over Bell Group assets.

  He said the banks had the minutes drafted to create or generate evidence which would help them if the security scheme was ever challenged in court.

  "It's like a script for a play where they have got the chairman saying things before it even happened," Mr Robson claimed.

36      THE WEST AUSTRALIAN TUESDAY OCTOBER 17 2000
"Bell banks made up evidence: QC"
By Neale Prior

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  He alleged the January 1990 scheme constituted an imposition of deceit on other Bell creditors, was fraud on insolvency laws and an equitable fraud.

  The six Australian and 14 overseas banks gained the benefit of the security over the major assets belonging to Bell companies to cover about $260 million in unsecured loans that had been made to other Bell companies, it was alleged.

  Mr Robson made the allegations while submitting a new statement of claim to the WA Supreme Court in the wake of litigation by Bell companies against six Australian and 14 overseas banks being transferred from the Federal Court in May this year.

  The banks put receivers into the group in April 1991 and realised about $280 million from the sale of Bell's publishing assets, which included The West Australian, and the sale of shares in Bell Resources. The proceeds were distributed among the banks, leaving nothing to meet claims from other creditors owed more than $1 billion.

  The claim by Taylor Woodings accountant Mr Woodings and his sidelined PricewaterhouseCoopers co-liquidator, Geoff Totterdell, could amount to more than $1 billion once interest and damages are taken into account. It is alleged the banks knew or ought to have known the Bell companies were insolvent when they took security over the valuable assets of the group.

  The banks include Westpac, the Commonwealth Bank and National Australia Bank. They are vigorously fighting the litigation and claim the court should not accept the eighth version of a statement of claim.

  Mr Robson told Justice Neville Owen that the Bell companies were under the management of senior Bond Corporation executives, including David Aspinall, when the security scheme was put together.

  He said financial problems within Bond companies were well publicised in 1989 and sources of revenue for Bell Group from other Bond companies were being lost. It had also been warned about a $63 million claim coming from the Australian Taxation Office.

  "The banks had information which showed that the survival of the (Bell) group depended upon income coming from the [Alan] Bond Group and around their eyes the Bond group was collapsing," he said.

  Mr Robson said the banks engaged in a calculated lack of inquiry about the financial affairs of Bell Group before taking security over assets and participating in a transaction that would improve their position at the expense of other creditors.

  "Each bank knew the financial position it faced, they knew that the loans could not be repaid," he said. "They had nothing to lose, the worse that could happen was that they would have it taken off them," he said.

  The argument before Justice Owen continues today.

Picture caption: Tony Woodings: Bell banks could be hit with a claim of more than $1 billion.

-- © Neale Prior, The West Australian, October 17 2000, p 36. To e-mail letters to the editor use letters@wanews.com.au

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