Murdoch Minor to Testify Again in Australian Telco Trial

22 November 2005

Lachlan Murdoch, who recently defected from the US-based family business to return down under, will today (Tuesday) testify for the second time in an investigation into the collapse of failed Australian telco OneTel.

His previous stint in the witness stand was in 2002, where he testified at a liquidators hearing along with fellow former OneTel director James Packer, son of media tycoon Kerry.

Both scions sat on the board of the insolvent telco as non-executive dirctors, representing the substantial investment interests of their respective fathers.

And both claimed at the earlier hearing that they had been "profoundly misled" as to the company's true financial state by OneTel founder Jodee Rich and finance director Mark Silbermann.

Rich and Silberman are this week joint-defendants in a court case instigated by the Australian Securities and Investments Commission, which seeks to recover A$92 million ($67.2m; €57.3m; £39.2m).

But counsel for defendant Rich, David Williams, will put it to Murdoch that the telco was in better financial shape than he and other non-executive directors claimed to have believed.

He is also expected to suggest to the witness that PBL, the Packer clan's holding company, pressured the non-executive directors into putting OneTel into voluntary liquidation - rather than underwrite fifty percent of a $132m rights issue. This is denied by PBL ceo Peter Yates.

Collectors of life's little ironies will recall that at the time of its Australian parent's collapse, OneTel's UK arm was acquired for £58m by British energy conglomerate Centrica.

They will especially relish the news that Centrica recently hung a 'for sale' ticket around OneTel's neck and among the interested parties is none other than BSkyB - the currently acquisitive UK satellite TV monopoly controlled by the Murdoch family [WAMN: 17-Oct-05].

Packer junior will take the stand next week.

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