OneTel Roadshow Goes Home for the Holidays

15 December 2005

On his final appearance at the Sydney Supreme Court, media executive James Packer denied putting his family's interests ahead of doomed telco OneTel before its failure in May 2001.

Publishing and Broadcasting, the media empire controlled by Packer's father, Kerry, was a major investor in the telco, while James was non-executive director on its board.

The court heard that PBL withdrew from a plan for a rights issue it was due to underwrite with the other major stakeholder, the Murdoch-controlled News Corporation, two days before the ailing business folded. The A$132 million ($99m; €82m; £56m) life-raft could possibly have kept the company afloat.

Packer junior was giving evidence for the Australian Securities and Investments Commission which is suing OneTel's former managing director Jodee Rich and ex-finance chief Mark Silbermann for A$92m. It claims they allowed the company to trade while insolvent for up to three months before it collapsed.

Packer was asked if he sought to convince the other OneTel directors at the May 29 board meeting that A$132m was nowhere near enough to cover all the company's outstanding debts so that they would be inclined to cancel the rights issue.

He said he did not think about the conflict of interest at the time. But he agreed that at the May 27 meeting of PBL executives he and others there had come to the conclusion that unless something came "out of the ether", money came from another source, the rights issue would not go ahead because A$132 million was considered insufficient for its needs.

Packer and his equally illustrious friend and fellow non-exec director Lachlan Murdoch, have both maintained they were misled about the telco's precarious financial state.

The hearing has now been adjourned until the end of January.

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