Coun­cil man­ager ad­mits con­fu­sion

Townsville Bulletin - - Investor -

THE gen­eral man­ager of a NSW coun­cil has ad­mit­ted to con­fu­sion and a lack of un­der­stand­ing about the fi­nan­cial prod­ucts the coun­cil in­vested with Lehman Brothers Aus­tralia in early 2007, a court has heard.

Michael Hyde said he un­der­stood from Lehman Brothers that the coun­cil could re­deem its multi-mil­lion­dol­lar in­vest­ment at face value within three days.

Mr Hyde also told the Fed­eral Court in Syd­ney he had be­lieved the in­vest­ments would ma­ture within two to three years, but later dis­cov­ered they were not due to ma­ture un­til 2047.

The Winge­car­ribee Shire Coun­cil is su­ing the liq­uida­tor of Lehman Brothers Aus­tralia, for­merly Grange Se­cu­ri­ties, to re­cover $ 21.4 mil­lion in losses.

The land­mark case, which in­volves 72 lo­cal coun­cils and char­i­ties, has heard ev­i­dence by three se­nior Winge­car­ribee em­ploy­ees, who each tes­ti­fied that they told Grange not to i n v e s t i n c o l l a t e r a l i s e d d e b t obli­ga­tions. Lawyers for Lehman Brothers ar­gued the staff never gave those in­struc­tions.

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