DECEMBER 03, 2002 MYSTERY surrounds the role played by Domenic Martino, the head of one of Australia's largest accounting and consulting firms, in trying to save junior telco New Tel from collapse.
Australian IT has learned that Mr Martino, chief executive of Deloitte Touche Tohmatsu in Australia, has been advising his long-time business associate and friend Peter Malone, chief executive of New Tel, to try to stitch-up deals to save the company and avoid the appointment of an independent administrator.
His involvement comes despite Mr Martino himself denying such a role and attempts by Deloitte Touche to distance itself from the controversy.
Mr Martino was a director of New Tel until February. Shareholders are angry that the company raised more than $100 million in equity - while Mr Martino was a director - but now sits on the brink of collapse. While he was a New Tel director, Deloitte earned more than $4 million in fees from New Tel in consulting work over the 2000 and 2001 financial years. The firm is one of a number of creditors to New Tel and is owed more than $300,000.
Deloitte is also involved in accountancy work for New Tel. New Tel's accounts have not been signed off by auditors KPMG since the December half year as the firm tries to help restore the company on the lists of the Australian Stock Exchange. It was suspended from trading in late October.
Mr Martino has consistently denied any involvement in negotiations with potential investors in New Tel over the past month, saying it would be a conflict of interest.
But Chris Burke, a director of Sydney-based Astron Communications, met with Mr Martino in mid-November and discussed buying parts of the New Tel business.
He and others at the meeting were left in no doubt that Mr Martino was playing an active role in New Tel's affairs.
"A meeting was arranged with Peter Malone in Deloitte's offices," Mr Burke told The Australian. "(Mr Malone) didn't turn up. I waited for about 20 minutes and I was just about to leave but that's when Dominic took over."
Mr Burke's account of Mr Martino's role tallies with creditors who, speaking on the condition of anonymity, have been surprised by the high-profile role Mr Martino has taken in New Tel.
"We could not really determine why he contacted us or what his role was," one creditor said.
Mr Martino stressed that his role was merely to tell creditors that insolvency firm Sims Lockwood was handling the New Tel issue.
A spokeswoman for Deloitte would not comment about the Burke meeting.
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