95m stock withdrawal led to open collapse

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    http://www.theaustralian.news.com.au/story/0,25197,23526126-5005200,00.html

    $95m Stock Withdrawal led to Open Collapse

    Richard Gluyas and Paige Taylor | April 12, 2008

    MINING entrepreneur Norman Seckold's withdrawal of $95 million worth of stock from Opes Prime is believed to have beenthe catalyst for the stockbroker's ultimate demise.

    Mr Seckold, who helped to engineer a $US1.1 billion ($1.2 billion) merger last year between his Bolnisi Gold and Palmarejo groups with Canadian silver miner Coeur d'Alene Mines, is understood to have recovered his stock. But his decision to do so prompted a successful approach by Opes to its lender, ANZ, to extend a replacement line of credit last month.

    When ANZ inspected Opes's books, "irregularities" were uncovered that eventually forced the bank to appoint areceiver.

    Mr Seckold could not be reached for comment yesterday. There is no suggestion he knew Opes was in trouble.

    Greek investor Nick Mitris has also moved to centre-stage in the Opes Prime drama. His account is understood to have been one of six problem accounts that owe the collapsed broker $128 million.

    Mr Mitris, recently valued at $201million, made a fortune with his brother-in-law Nick Balagiannis in 1997 by selling their video-game business, Olympic Amusements, for $170 million.

    He now concentrates on playing the stock market and keeping an eye on his Queensland prawn farm.

    While Mr Mitris's Opes debt falls well short of that of the broker's biggest customer, Sydney lawyer Chris Murphy, he is still a significant player understood to owe Opes about $10 million to $12 million. Mr Mitris did not return calls yesterday.

    Opes chief operating officer Dean Boyle was interviewed yesterday by investigators from the Australian Securities and Investments Commission as part of its investigation into the collapse.

    In Singapore, underworld figure turned industrial mediator Mick Gatto, who went overseas to uncover supposedly hidden funds on behalf of Opes clients, dined at Checkers at the Hilton with associates Matt Tomas and John Khoury before his flight home to Melbourne last night.

    Mr Gatto said "it's mission accomplished" a day after securing a meeting with Opes's most prominent figures in Singapore: Gordon Browne, Jay Moghe and Raj Maiden. After a 75-minute explanation from the trio, Mr Gatto said he was satisfied there were no hidden assets to be extracted on behalf of his clients. He said they were "as innocent as the victims". "We have spoken to all our clients and they are happy with the situation," he said.

    Mr Gatto said he did not wish to comment on reports that drug lord Tony Mokbel's money had been invested in Opes and that it precipitated the collapse. "He's no friend of mine," Mr Gatto said.

    At Thursday's meeting, Mr Browne made it clear he believed Opes collapsed because of the combined effects of the activities of Opes subsidiary Hawkeswood and the accounts of clients, including Mr Murphy and Mr Mitris.

    Mr Browne said after the meeting he had given Mr Gatto the same information he had given the receivers, Deloitte, and had nothing to hide. At one point during the meeting, Mr Gatto interrupted the trio, saying: "I think I've heard enough, you guys seem pretty reasonable."

    Mr Browne believed the collapse had occurred "through sheer stupidity and the failure to properly exercise margin calls".

    "Several clients have been largely responsible for the fall and there have been some activities in the Hawkeswood account that need to be looked at in more detail," he said.

    Mr Moghe maintained he was not responsible for or aware of suspicious transactions that preceded the collapse.

    The sole director and shareholder of British Virgin Islands-registered company Riqueza, he said he had last week begun "handing in" documentation, ownership and directorships relating to Opes. "The bulk of it is done, actually," he said.
 
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