travel ban on another opes director

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    Travel ban placed on Opes Prime director
    Monday Apr 7 19:44 AEST
    The Federal Court of Australia ordered that a director of collapsed stockbroker Opes Prime, Julian Smith, be restrained from leaving Australia until Friday, April 11.

    In an urgent hearing, Justice Ray Finkelstein also ordered that Mr Smith surrender all passports in his possession and any tickets for his international travel during the next 12 months.

    The Australian Securities and Investments Commission (ASIC), sought the court prohibition on Mr Smith leaving Australia without the consent of the court.

    Receivers and managers were appointed to the Opes Prime Group, Opes Prime Stockbroking, Leveraged Capital and Hawkswood Investments on March 27 after cash and stock movement irregularities were uncovered in some of the client accounts of Opes Prime Stockbroking.

    ASIC has a special team investigating any potential breaches of the Corporations Act in relation to Opes.

    Opes Prime was involved in the borrowing and lending of securities, and Opes clients pledged shares to Opes as security for margin loans.

    ASIC investigator Richard Vandeloo said in his affidavit of April 7 that as a result of his investigations into Opes Prime Stockbroking, there appeared to have been double counting of stock held by "EE" (people and companies are not identified in the affidavit to protect their privacy).

    This stock appeared to have been lent firstly to Leveraged Capital, of which Mr Smith and Opes Prime boss Laurie Emini were directors and equal shareholders, and then subsequently re-introduced into the Opes Group via an entity "AA".

    Mr Vandeloo said that the financial position of a client account, "BB", was now in default for $38 million.

    This position was suspected of having been concealed before the appointment of receivers and administrators.

    Before this time, the client account BB was not in default of any margin calls.

    Mr Emini and Mr Smith are suspected of having an interest in the BB account.

    "I suspect that Mr Smith may have had knowledge or been involved in the double counting of stock held by entity `EE' and possibly also in concealing the true financial position of the client account `BB'," Mr Vandeloo said in his affidavit.

    "It appears that the effect of the double counting was to avoid margin calls on certain client accounts."

    Mr Vandeloo said "AA" was a company incorporated in the British Virgin Islands and the sole director and shareholder was "DD".

    Mr Vandeloo said Mr Smith has a family holiday booked for April 13 for 10 days in Fiji and ASIC had concerns about him leaving the country.

    Mr Vandeloo said he believed Mr Smith had the means to leave Australia at short notice.

    Mr Vandeloo said he was informed from the balance sheet of Leveraged Capital as at 27 March of a director's loan of $4.35 million from that company to Mr Smith, and a shareholder's loan of $1.15 million.

    The Federal Court has already placed restrictions on the travel of Mr Emini.

    ©AAP 2008
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