race for $3.25m: new tel

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    Race for $3.25m: New Tel
    By Geoff Elliott
    December 07, 2002
    PETER Malone, the boss of embattled telco New Tel, and his right-hand man Richard Steggall have a tough weekend ahead: they need to find $3.25 million or face the receivers on Monday.

    Mr Steggall, an executive from the mysterious Broadband & Wireless Ltd, failed to come up with the necessary money yesterday.

    BWL is attempting to buy out more than $20 million of New Tel's debts from Telstra and Optus for about 50c in the dollar.

    Mr Malone was said to be frantic late yesterday as Optus asked PricewaterhouseCoopers to investigate BWL's funding claims, amid concerns that BWL could be a front company for Mr Malone and interests associated with him.

    Sources said PWC was likely to be appointed as receivers if, BWL's claims to funding are found to be groundless.

    BWL's Mr Steggall, who is serving a three-year suspended sentence for fraud, has made much in the last month of BWL and a facility it claimed to hold with ANZ.

    But a spokeswoman for ANZ yesterday denied any relationship with BWL.

    Sources within New Tel said Mr Malone was desperate to avoid independent administrators assessing New Tel's books at a time when an Australian Securities and Investments Commission investigation was already under way into the company, and shareholders were wondering where more than $100 million raised during the dotcom boom had gone.

    Mr Steggall took a short stroll from New Tel's North Sydney's offices to Optus's headquarters yesterday afternoon and was given a 48-hour extension to come up with the money, subject to PWC conducting more due diligence into BWL's claims.

    Optus executives are concerned that any payments from BWL that are later found to have come from New Tel could be unwound as preferential payments, leaving Optus back at square one.

    Approached on leaving New Tel's offices yesterday for his meeting with Optus, Mr Steggall refused to answer questions, even to the point of denying he was Richard Steggall.

    A spokesman for Optus refused to confirm PWC's role, only saying: "The situation is very fluid, but it will be resolved one way or another by Monday." Optus has attempted to distance itself from Mr Steggall following revelations about his background this week, but the 26-year-old has played a key role in negotiations in the last month to try to buy out New Tel's debts.

    Sources indicate that Domenic Martino, the chief executive of accounting firm Deloitte Touche Tohmatsu and a director of New Tel until February, continues to take an active interest in whether New Tel will manage to stave off the appointment of an administrator.

    Meanwhile, ASIC refused to comment on the progress of its investigations, which cover allegations that New Tel traded while insolvent.
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