Collins & Spencer
IT'S not often a public examination led by a group of accountants can expect to draw a full house, but it's not often $250 million vanishes from the books of a listed company.
Next month's examination of three Bill Express directors in the Federal Court, along with the directors of myriad related parties of the electronic payment company, can expect a large audience.
Liquidator PPB has requested the public examinations into the demise of the company sponsor under sections 596A and 596B of the Corporations Act, which can force directors to answer questions under oath about a company's financial dealings.
Certainly shareholders in Bill Express and its collapsed parent, On Q Group, the holding company that spun out Bill Express' electronic payment technology, will be in court to learn what happened to their now-worthless investments. Those investors include Lindsay Fox and Gerry Harvey, two of Australia's most prominent businessmen.
Many newsagents and merchants who leased the Bill Express terminals will also be in court. They were left holding the bag, in the form of long-term rental agreements on useless equipment, when the company went under in 2008.
Expect, too, to see plenty of m'learned friends representing corporate giants such as Optus, owed $63 million when Bill Express collapsed, ANZ ($53 million), Vodafone ($31.5 million) and Telstra ($15.5 million) - and lawyers representing the people now preparing to take the stand to answer questions under oath about transactions, overseas fund transfers and accounting practices that have puzzled the liquidator for the better part of two years.
Those summonsed to appear include three former directors of Bill Express, Ian Christiansen, Sean Slattery and Julian Little. Marc Lichtenstein, a past chief financial officer of Bill Express, Peter Couper, the former CFO of Bill Express and On Q Group, and Sandro DiDonato, the director of the Technology Business Systems group of companies that operated from Bill Express' Melbourne offices have also been ordered to appear.
TBS leased the network of 14,000 Bill Express terminals to merchants but was never part of Bill Express.
Lawyers for Couper and DiDonato have lodged objections over the scope of questioning their clients might face while in the dock.
Members of the audit teams of KPMG and Pitcher Partners, which signed off on the accounts of Bill Express, will also appear before the public examination, as PPB tries to ascertain why two of the country's leading accounting firms signed off on the books. So far the former auditors have refused to co-operate with the liquidator.
Two representatives of Optus will also be called to give evidence.
Given that Bill Express was an empty vessel when they took control, PPB's Craig Crosbie and David Webb seem persistent in calling for the public examination.
Crosbie says he is keen to get to the bottom of a $250 million ''black hole'' in the accounts of Bill Express.
''The overriding reason for these public examinations is to get some kind of understanding about what happened, and get it under oath,'' Crosbie said.
Indeed, PPB's original report on Bill Express, published in 2008, found:
? $50 million of Bill Express fixed assets cannot be located or the ownership is disputed.
? $80 million of payments were made to TBS between December 2005 and March 2007, despite Bill Express not being ''contractually bound to do so''.
? $94 million of loans were made to ''associated entities'' that are unlikely to be collected, including $51 million owed by TBS and $22 million by On Q.
? $16 million of assets purchased from TBS in December 2003 are not included in the Bill Express asset register.
? A $5.5 million alteration to Bill Express' ledger accounts for ''balancing loan to statement'' was not approved by the board.
? $2.9 million was paid to a private company called Bill Express Payments.
While PPB tries to get the answers about where that money went, former Macquarie Equities stockbroker Nelson Chan faces charges for allegedly manipulating the price of Bill Express shares. Chan faces eight charges of market manipulation following an investigation by the Australian Securities and Investments Commission. If convicted, he faces up to five years in jail.
At least Bill Express merchants were cheered by court action taken by the Australian Competition and Consumer Commission, which resulted in nearly 3000 small businesses not having to pay $495 a month on Bill Express terminals that did not work.
The first of 11 days of public examination is scheduled for March 9. If you plan to go, arrive early to get a seat.
