Former One.Tel managing directors, Jodee Rich and Bradley Keeling, may be sued for $50 million by ASIC for not coming clean on the financial status of the company before its collapse earlier this year.
ASIC is also seeking orders from the NSW Supreme Court for Rich and Keeling, as well as former finance director Mark Silbermann and former chairman John Greaves, to be barred from managing or directing any company for an indefinite time.
In a statement released yesterday, ASIC says it issued the proceeding because of the reduction in value of One.Tel from 30 March 2001 to 29 May 2001. ASIC alleged that "Messrs Rich, Keeling and Silberman had information or access to information regarding the financial condition of One.Tel that was withheld from the One.Tel Board and the market. ASIC alleges that their conduct constituted a breach of their duties as officers of the company."
"Evidence available to ASIC indicates that the true financial position of One.Tel was not known to the remaining directors of the company, Messrs Lachlan Murdoch, James Packer, Rodney Adler, Peter Howell-Davies and Pirjo Kekalainen-Torvinen, until shortly before the appointment of the administrator on 29 May 2001."
ASIC says any money recovered will be handed to One.Tel liquidator Ferrier Hodgson to pay creditors. One.Tel has debts totalling more than $600 million to 3000 creditors.
One major creditor is Lucent Technologies. At the time of One.Tel's collapse, Lucent was in the final testing stages of a A$1.2 billion national GSM mobile phone network which it funded on One.Tel's behalf, with One.Tel alleged to still owe approximately A$600 million for the rollout.
Other creditors include corporate investors in One.Tel, who include the country's two biggest publishing operations -- Rupert Murdoch's News Ltd. and Kerry Packer's Publishing & Broadcasting Ltd. (PBL).
Among the One.Tel directors alleged by ASIC to have been kept in the dark by the defendants were sons of the two publishing magnates -- News's Lachlan Murdoch and PBL's James Packer. They have stated that they were "profoundly misled" by the defendants.
Rich has had a long and colourful career in the Australian IT industry. He launched computer distribution company Imagineering at the age of 21 in 1981, took it public in 1985, and earned himself the position of the youngest member of Australia's Richest 200 list before the company collapsed in 1991. Fellow defendant Keeling was also an executive of that company.
Reappearing with One.Tel in 1995, Rich's paper worth in One.Tel shares was estimated at over A$1 billion when the stock market was at its height. Two days after One.Tel's collapse this year, Rich assigned A$9 million of assets to his wife, prompting ASIC to freeze his assets.
Rich and Keeling both resigned from the company in May this year and One.Tel was placed in administration less than two weeks later.