Packer's Dim Memories of OneTel Disaster

30 November 2005

The puzzling amnesia bug which has afflicted the characters in Australia's latest soap opera Friends Meet Cell Block OneTel [WAMN: 24-Nov-05] is not responding to treatment.

The latest victim is our other troubled hero, James Packer, who seems bewildered by the questions he is being asked about his directorship of ill-fated telecoms venture OneTel.

Dramatic pauses punctuated his evidence as he took the stand in the Australian Securities and Investments Commission's civil case against former OneTel directors Jodee Rich and Mark Silbermann.

The pair are being sued 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.

Packer, scion of Publishing and Broadcasting magnate Kerry, wanted to prove his business acumen to dad by investing millions of dollars in the venture.

He and his mate, Lachlan Murdoch, elder son of News Corporation chairman Rupert, were installed as non-executive directors when the media empires of their respective parents generously financed OneTel.

In the event, however, the two companies lost close to A$1 billion when the telco went to the wall.

The Sunday before the collapse of the company seems to be a blur for Packer, even though he had two meetings that day to discuss the doomed business. His family had more than A$300 million at stake.

The court heard Packer first went to Murdoch junior's Sydney home to apologise for the impending disaster. The Murdochs had invested more than A$500m in the company.

Packer told the court: "I believe I do recall saying to Mr Murdoch, I'm sorry." And he said he remembered that Lachlan said it was "Okay". After that it is a blank.

Alarmingly, the day's second meeting, at OneTel's offices, is even more vague. Says Packer: "I have no vivid recollection of attending a meeting that night, but I accept that I did."

The hearing continues.

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