ANZ faces $2.5b claim from In­dian so­cialite cou­ple

The Pak Banker - - COMPANIES/BOSS -

In a com­mer­cial court­room on the third floor of the Vic­to­rian supreme court com­plex, lawyers are feast­ing. For the next three months - or pos­si­bly six months, de­pend­ing on which bar­ris­ter you ask - this court­room will host a lu­cra­tive le­gal battle be­tween a pow­er­ful In­dian bil­lion­aire cou­ple and one­time Western Aus­tralian so­cialites, Pankaj and Rad­hika Oswal, against, in var­i­ous claims, the ANZ bank, the re­ceivers ap­pointed by the bank, and a group of com­pa­nies with which they were once in part­ner­ship. It is a com­plex case, and has been re­ported to be the big­gest civil trial in Vic­to­rian supreme court history. The le­gal fees have al­ready re­port­edly amounted to tens of mil­lions of dol­lars.

"On any view," as Alan Archibald QC, one of nine se­nior coun­sel en­gaged to ap­pear on the first day of the trial on Mon­day re­marked to Judge Julie DoddsStree­ton, "it's heavy and lengthy".

Three claims, two with the Oswals as plain­tiffs and one with them as de­fen­dants, will be heard con­cur­rently. The open­ing state­ments alone are ex­pected to take 12 days.

At the heart of all three mat­ters is a claim by the Oswals that their 65% stake in what was then called Bur­rup Hold­ings Lim­ited, a fer­tiliser plant on the Bur­rup Penin­sula near Kar­ratha on WA's north-west coast, was sub­stan­tially un­der­sold by re­ceivers in 2012.

They are seek­ing $US1.8bn in com­pen­sa­tion for the sale and ad­di­tional com­pen­sa­tion for a duress claim brought by Rad­hika Oswal against the ANZ, which al­leges, among other things, that a se­nior ANZ ex­ec­u­tive slung an arm around Pankaj's neck in what the state­ment of claim de­scribes as "an un­friendly man­ner" and said: "Bloody well sign the doc­u­ments or we will de­stroy you." ANZ de­nies that ever oc­curred. Fol­low­ing the com­pli­cated pro­ceed­ings re­quires an an­no­tated seat­ing chart of the court­room and, if pos­si­ble, a brief pow­erpoint pre­sen­ta­tion.

Seated in three rows of bar ta­bles on Mon­day were 24 bar­ris­ters, a third in silks, nine of whom were act­ing for the Oswals on var­i­ous claims.

Be­hind them, in the pub­lic gallery, were scores of solic­i­tors, as­so­ciates and rep­re­sen­ta­tives from the com­pa­nies in­volved, in­clud­ing, seated in the centre of the front row, Pankaj Oswal. His wife did not at­tend.

Pankaj is the plain­tiff on the first claim, which al­leges that the cou­ple's com­bined shares in Bur­rup Hold­ings were un­der­sold by $US800m.

The Bur­rup group was placed into re­ceiver­ship in 2010 and the shares sold for a base price of $US560m to a group headed by Yara Aus­tralia, which al­ready con­trolled the re­main­ing 35% of the com­pany. The sale was com­pleted by re­ceivers on 31 Jan­uary 2012. Tony Ban­non SC, lead coun­sel for the Oswals on this par­tic­u­lar claim, sub­mit­ted to the court on Mon­day that the sale price was just enough to clear the Pankaj Oswal's debt with the ANZ and that the true value of the shares at that time was just un­der $US1.4bn.

He said the Oswals were there­fore en­ti­tled to com­pen­sa­tion of $US1.2bn (A$1.67) or, if the sale agree­ment was set aside and the shares di­vested, $US1.8bn (about A$2.5bn) based on cur­rent valu­a­tions.

"We sub­mit it was no co­in­ci­dence that the share sale price ended up at US$560, enough to pay out the Oswal debt plus ex­penses, be­cause the bank and re­ceivers made it clear to any­one who cared to lis­ten, in­clud­ing bid­ders, that their pur­pose was sim­ply to clear that debt and they dis­closed the amount of that debt to po­ten­tial bid­ders," Ban­non said.

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