And the insider trading and manipulation that went on here in the states and abroad hasn't even been made an issue yet. It should have been years ago. Lock em all up.....
New Tel directors may face charges
By Michael Sainsbury, Telecommunications
January 07, 2003
FAILED telecommunications company New Tel may have traded while insolvent for as long as 12 months before it was placed into administration – leaving directors, including Deloitte Touch Tohmatsu's chief, Domenic Martino, facing possible criminal charges.
This was revealed yesterday in the first report to creditors by Philip Carter and Gregory Hall of PricewaterhouseCoopers.
According to creditor sources, the administrators said they suspected New Tel had traded without sufficient funds to cover its financial commitments for a year before its collapse late last year.
Mr Carter and Mr Hall could use the broader powers available to liquidators to take their investigations further.
At a meeting on Monday, they'll recommend to creditors, who are owed as much as $50 million, that New Tel be put into liquidation.
Perth-based New Tel was placed in administration on December 10 after a tumultuous four months during which a series of deals designed to prop up the company failed.
"Our inquiries to date have indicated a number of matters which we consider deserve more extensive investigation, utilising the powers available to the liquidator," the administrators said in their report.
"It is, therefore, our view that the creditors' best interests will be served by the company being placed into liquidation without delay."
But in the full report to creditors – not released publicly – the administrators outlined more serious concerns about insolvent trading, according to the source.
Such trading is illegal, and directors of companies that have done so face the possibility of substantial fines and jail.
Liquidators can unwind preference payments made by companies up to six months before an administrator was appointed. They can also unwind uncommercial transactions for up to two years before the administration date, and related party transactions up to four years before.
Such transactions may include a $4 million payment to Deloitte during 2000-2001, and a $1 million payment believed to have been made to New Tel's failed white knight, Broadband and Wireless.
New Tel chief executive and founder Peter Malone, who once said his ambition was to become Qantas' No. 1 frequent flyer, is likely to be a target of any fresh investigations.
His Perth beachside residence and sports cars could prove to be targets for liquidators as they seek assets to make up the shortfall in New Tel's finances.
Mr Martino quit the New Tel board in February last year.
However, he may be implicated if the company's insolvent trading dates back as far as administrators suspect.
Mr Martino is also understood to have been closely involved in attempts to save the company.
Other New Tel directors include Perth identity Harry Sorensen, US-based Mark Hake, and Hong Kong-based An Zhou and Gary Koh.
The administrators were unavailable for further comment, a PwC spokesman said.
theaustralian.news.com.au |
