Murdoch Junior Concludes Evidence in OneTel Case

28 November 2005

Lachlan Murdoch spent three days last week giving evidence in the civil hearing against the former bosses of collapsed Australian teleco OneTel.

Arraigned are ex-managing director Jodee Rich and erstwhile finance chief Mark Silbermann. The pair are being sued by the Australian Securities and Investments Commission for allegedly allowing the company to trade while insolvent for at least three months before its A$92 million ($67m; €57m; £39m) implosion in 2001.

Murdoch, elder son of News Corporation chairman Rupert, failed to recall many details of the time he spent as a non-executive director of OneTel together with his friend James Packer, scion of Publishing and Broadcasting magnate Kerry.

However, under questioning by Rich's lawyer, David Williams, Murdoch junior denied blaming Rich for the telecoms firm's financial woes to deflect attention from his own shortcomings.

He refuted the suggestion that he had "formulated a strategy" against OneTel's management after it went bust to avoid his own investigation by ASIC.

Williams suggested Murdoch had gone to ASIC because he decided "one of the best ways of dealing with potential problems that you may face as a director was to claim you were profoundly misled".

Murdoch said: "I didn't think there were any potential problems so the answer is 'no'. I would assume ASIC would look at all the directors and examine their performance in this situation."

OneTel was launched in 2000 with generous financing both from NewsCorp and PBL. Murdoch and Packer juniors were installed on the board to safeguard their parental investments. However, the two media companies together lost about A$1 billion in the collapse.

James Packer is due to give evidence this week as the case continues.

Data sourced from Sydney Morning Herald; additional content by WARC staff