George Georges Level 29, 600 Bourke Street, Melbourne Vic 3000 Chartered accountant and registered liquidator 22 December 2011

Transcription

1 Affidavit Federal Court of Australia No. VID 562 of 2010 District Registry: Victoria Division: Corporations IN THE MATTER OF: SON RAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN GEORGE GEORGES & JOHN ROSS LINDHOLM IN THEIR CAPACITIES AS JOINT AND SEVERAL LIQUIDATORS OF SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN First plaintiffs and others according to the schedule Affidavit of: Address: Occupation: Date: George Georges Level 29, 600 Bourke Street, Melbourne Vic 3000 Chartered accountant and registered liquidator 22 December 2011 Contents Document number Details Paragraph Page 1 Affidavit of George Georges sworn on 22 December Exhibit "GG8" Tab 1, being copy of letter from Daniel Faigen to George Georges dated 14 July 2011 and attached documents Exhibit "GG8" Tab 2, being copy of printout of extract of online bank statement for account number for the period 5 June 2009 to 22 September Exhibit "GG8" Tab 3 being copy of excel spreadsheets and printouts of instructions from Asian Corporate Advisers Limited to Hong Kong and Shanghai Banking Corp and a printout of supporting bank confirmations from HSBC Exhibit "GG8" Tab 4 being copy of bank statements in the name of APBC account number from the period 7 May 2004 until 25 May 2010 Exhibit "GG8" Tab 5 being copy of from D Faigen to G Georges dated 21 November Filed on behalf of (name & role of party) Plaintiffs Prepared by (name of person/lawyer) Allan Kawalsky Law firm (if applicable) Norton Rose Australia Tel Fax allan.kawalsky@nortonrose.com Ref Address for service Norton Rose Australia, RACV Tower, 485 Bourke Street, Melbourne Victoria 3000 (include state and postcode) allan.kawalsky@nortonrose.com _1

2 2 7 8 Exhibit "GG8" Tab 6 being copy of excel spreadsheet relating to the SKM account Exhibit "GG8" Tab 7 being copy of the schedule to the ISDA Master Agreement dated 23 December Eighth Affidavit of George Georges I, George Georges, of Level 29, 600 Bourke Street, Melbourne in the State of Victoria, chartered accountant and registered liquidator, say on oath: 1 Exhibited to this affidavit is a folder of documents marked "GG-8". References to GG-8 followed by a reference to a volume and tab number are references to that exhibit and the volume number and tab number within the exhibit folder where the document is to be found. 2 I refer to my affidavit sworn on 17 October 2011, hereinafter referred to as My Sixth Affidavit and adopt the terms and definitions used therein. 3 At paragraph 84 of My Sixth Affidavit sworn on 17 October 2010 I deposed that the only signed client account application forms which I could locate amongst Sonray's books and records for any person associated with Maryland Pty Ltd were those signed by: (c) (d) Anthony Charles Deague; Kristene Deague; Jono Deague, and Jonothan Deague and Justin Rodski 4 The only accounts recorded on Sonray Trader as referable to any person or entity associated with Maryland Pty Ltd or the Deague family were recorded in the names of the following entities: Asian Pacific Building Corporation (APBC), which was assigned the identifier SKM on the Sonray Trader platform, and linked to subaccounts SKM000101USD, and SKM000101USDA; VVHD International Pty Ltd, which was assigned the identifier SKM on the Sonray Trader Platform and was not linked to any sub-account; and 4PAC-#

3 3 (c) Anthony Deague, who was assigned the identifier SXH and linked to sub-account SXH000518A. 5 So far as I am aware, neither APBC or WHD International Pty Ltd have signed Client Application forms. 6 On or about 14 July 2011 I received a letter from Daniel Faigen to me dated 14 July 2011 referring to and attaching, amongst other documents, copies of spreadsheets provided by Scott Murray to the Deague family members concerning their investments in Sonray and also a list of deposits and withdrawals which they submitted they had confirmed as having occurred. The letter and the attached documents is at GG8 Tab 1. 7 On various dates between 15 and 21 November 2011 Daniel Faigen, corporate counsel for APBC and legal representative for Kristene Deague, David Deague, Maryland Pty Ltd and APBC, provided to me the following documents: Printout of an extract of an online bank statement for account number , purported to be an account in the name of David Deague, for the period 5 June 2009 to 22 September 2009, a copy of which is at GG8 Tab 2; Excel Table entitled "All Transactions that came from ACAL Account referenced to ACAL Account and FH Transaction Listing" with bundle of documents supporting the information in that table comprising: (i) (ii) Printout of instructions from Asian Corporate Advisors Limited (ACAL) to Hong Kong and Shanghai Banking Corp (HSBC) for transfer of funds; and Printouts of the supporting bank confirmations from HSBC, other than supporting bank confirmation for the deposits of AUD121, and USD225, on 20/09/2005, copies of which are at GG8 Tab 3; (c) A selection of bank statements in the name of APBC, with account number , from the period 7 May 2004 until 25 May 2010, copies of which are at GG8 Tab 4; PAC-#

4 4 (d) An from Daniel Faigen to George Georges dated 21 November 2011 which seeks to confirm purported Kristene Deague Deposits, a copy of which is at GG8 Tab 5. 8 Before receiving those documents (the last of which was received after the conclusion of hearing that commenced on 24 October 2011) I was unable to attempt a reconstruction of SKM With the aid of the documents provided by Daniel Faigen I was able to attempt to reconstruct SKM by stripping out all transactions which were not funded by deposits of real funds from any person associated with APBC and adopting the following process, as referred to in steps 1 to 3 of Annexure A of my Second Supplementary Statement dated 31 October 2011: (c) (d) (e) Download Account Statement from Sonray Trader. Copy and paste information from Account Statement into Excel worksheet. Insert three additional columns which record the adjusted net change, the adjusted account balance, and comments regarding the adjustments. Review the detailed transaction description to identify purchases of investments and the subsequent sale of those investments; Review each transaction and make adjustments if required based on the assumptions listed below: (i) (ii) (iii) (iv) The risk profile of each investor does not change throughout the course of operation of the account, regardless of the quantity of funds in the account; The investor would not have been able to enter into transactions without available cash in the account; Scott Murray had a discretionary authority to conduct all trades on and all trades were entered in order to maximize returns for the relevant account holder; If deposits and withdrawals were not confirmed by a source document referred to in paragraph 7 above they were treated as being an unfunded deposit or withdrawal; APAC-# v1 0004

5 5 (v) (vi) (vii) (viii) (ix) (x) If the adjusted available account balance prior to a purchase of an investment was positive then it was assumed that the same trade would have been undertaken, but in proportion to the adjusted available account balance. Accordingly the volume of the trade was adjusted to take into account whether there were sufficient available funds in the adjusted account balance, as a result of the removal of the unfunded transactions, and to reflect the assumed prevailing risk appetite of the investor at the time of the trade. If the adjusted available account balance was negative prior to a purchase then it was assumed that the purchase would not have occurred; Where the sale of an investment occurred, but there was no apparent corresponding purchase, the actual realization from sale has been used in the recalculation of the adjusted position. In other words, no adjustment has been made for the fact that no corresponding purchase of an investment could be identified. These occurrences are rare. Where the sale of an investment occurred, but the purchase has been adjusted under one of the assumptions above, then the sale proceeds benefitting the account have also been adjusted in the same proportion to the purchase. Where interest has been credited to, or charged to, the account the same rate of interest has been used, but the amount credited or charged has been recalculated in accordance with the adjusted available account balance. Where a transaction, for example a purchase, does not have an obviously related transaction, for example a sale, transactions with a negative impact on the account are assumed to be purchases and transactions with a positive impact on the account are assumed to be sales. 10 I was unable to reconstruct the account because the exercise very quickly produced unrealistic results with the total balance of the adjusted account falling to approximately negative $233 million on 20 November 2007, the account having commenced on 4 October At this point I stopped trying to reconstruct the APAC-# v1 0005

6 6 account. This position arose as a result of the implementation of the assumptions described above. 11 The exercise under which I reconstructed the SKM account is contained in an excel spreadsheet at GG8-Tab With the aid of the documents referred to in paragraph 7, I indentified the following deposits and withdrawals in account SKM Deposits by ACAL, APBC, Jono Deague and Kristene Deague Withdrawals by Jono Deague 13 With the aid of the documents referred to in paragraph 7, I reviewed account SKM and identified: Deposits by ACAL, APBC and David Deague; Withdrawals by APBC 14 I am informed by Daniel Faigen, the solicitor for Maryland, and believe that: at all times that ACAL dealt with Sonray, ACAL was the trustee of the Norwegian Trust; and Maryland is presently the trustee for the Norwegian Trust and that in all its dealings with Sonray Maruland only ever acted as trustee for the Norwegian Trust. 15 The account of Anthony Deague, who was assigned the identifier SXH and linked to sub-account SXH000518A, was closed on 16 October 2009 with a nil account balance. 16 I do not know who entered the transactions recorded in SKM and SKM I believe that whoever recorded transactions in SKM and SKM did not have any regard as to which Deague related entity provided a deposit, obtained a withdrawal, or stood to benefit from any particular transaction. It appears to me that SKM and SKM do not reflect trading by APBC or WHD International, but rather are house accounts using both unfunded deposits and actual deposits by various Deague-related entities to conduct very risky trades. In those circumstances I have formed the view that both accounts are inextricably linked and cannot be considered separately from each other. Accordingly, as I was unable to reconstruct SKM using the assumptions APAC-#

7 7 and processes described above I did not attempt to reconstruct SKM An analysis of SKM using the processes and assumptions set out above would not have changed my view that a reconstruction of SKM and SKM is unrealistic and inappropriate for the purpose of determining entitlements for APBC and WHD International. Calculation of Actual Deposits Less Withdrawals 17 From the documents referred to in paragraph 7, I have been able to calculate the net balance of Maryland Pty Ltd, APBC, Kristene Deague and David Deague by comparing the sum total of each entity's deposits for the purpose of investment against the sum total of each entity's withdrawals from the Segregated Accounts. That analysis has produced the following result contained in the table below: Asian Corporate Advisers Limited/Maryland Pty Limited deposits $3,211, Asian Corporate Advisers Limited/Maryland Pty Limited withdrawals Nil Net Balance $3,211, APBC deposits into Sonray's segregated account $718, APBC deposits into Sonray's general account $1,990, APBC withdrawals $(3,082,000.00) Net Balance $(374,000.00) Kristene Deague deposits $100, Kristene Deague withdrawals $0.00 Net Balance $100, David Deague deposits $900, David Deague withdrawals $0.00 Net Balance $900, Schedule To ISDA Master Agreement 18 I refer to my affidavit sworn on 4 July At Tab 3 of Ex GG-5 to that affidavit I exhibited a copy of the ISDA Master Agreement between Sonray Equities Pty Ltd and Saxo Bank A/S which was incomplete because it did not include the Schedule referred to in the agreement. 19 A copy of the schedule to the ISDA Master Agreement dated 23 December 2011 is contained at GG8 Tab 7. SWORN by George Georges at Melbourne ) in Victoria on before me: Signature of Gedir Georges Signature of person taking affidavit APAC-# v1 ALLAN FARREL KAINALSKY RACV Ter, 485 Bourke Street Melbourne Victoria 3000 An Australian Legal Practitioner within the meaning of the Legal Profession Ad

8 SCHEDULE OF PARTIES GEORGE GEORGES & JOHN ROSS LINDHOLM IN THEIR CAPACITIES AS JOINT AND SEVERAL LIQUIDATORS OF SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN First Plaintiffs SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN Second Plaintiffs SEABORN INTERNATIONAL PTY LTD ABN AS TRUSTEE FOR THE SEABORN FAMILY TRUST First Defendant MARYLAND PTY LTD ACN AS TRUSTEE FOR THE NORWEGIAN TRUST Second Defendant ALISANTE PTY LTD ACN Third Defendant BON RIVER PTY LTD ACN Fourth Defendant ROLAND MARK WARD AS TRUSTEE FOR THE AWARD SUPERANNUATION FUND ABN Fifth Defendant EFAX PTY LTD ACN Sixth Defendant _1 0008

9 Federal Court of Australia No. VID 562 of 2010 District Registry: Victoria Division: Corporations IN THE MATTER OF: SON RAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN GEORGE GEORGES & JOHN ROSS LINDHOLM IN THEIR CAPACITIES AS JOINT AND SEVERAL LIQUIDATORS OF SONRAY CAPITAL MARKETS PTY LTD (IN LIQUIDATION) ACN First plaintiffs and others according to the schedule EXHIBIT GG8 This is the exhibit marked "GG8" produced and shown to George Georges at the time of swearing/affirming his affidavit on 22 December Before me: Signature of person taking affidavit ALLAN FARREL KAINALSKY RACV Tower, 48,1 Bourke sweet Melbourne Victoria 3000 An Australian Legal Practibonor vathin the meaning of the Legal Profession Act Filed on behalf of (name & role of party) Plaintiffs Prepared by (name of person/lawyer) Allan Kowa!sky Law firm (if applicable) Norton Rose Australia Tel Fax Ref Address for service Norton Rose Australia, RACV Tower, 485 Bourke Street, Melbourne Victoria 3000 (include state and postcode) [Form approved 01/08/ _1 0009