The Federal Court has ordered a big four bank to produce documents around its dealings with an expanding network of companies associated with the Forum Group, following Westpac’s proceedings against the troubled group for an alleged $200 million fraud.
Court documents related to Westpac’s case against Forum Finance and its directors, which has now been expanded to include a number of other related companies, indicate NAB is to be issued with a subpoena to produce documents related to high-value transactions between companies including Forum Direct, Forum Enviro and Forum Finance.
Forum Group Financial Services, Forum Group, Forum Enviro and Forum Enviro (Australia) have all been joined as additional respondents to Westpac’s proceedings arising from its original fraud detection against Forum Finance, with two other global banks now also caught up in the case.
Societe Generale has initiated Federal Court proceedings against Forum Finance and its director, Basile Papadimitriou, who remains absent from Australia, while Japanese bank Sumitomo Mitsui Banking, reported to have a fraud exposure of as much as $100 million, has also commenced a case against Mr Papadimitriou through its leasing division, SMBC Leasing and Finance.
The court recently ordered the appointment of provisional liquidators to the Forum Group, following the sale of servicing rights to the group’s clients and the transfer of 70 remaining staff to technology company Our Kloud in July.
The purchaser of the business assets was said to have a “family link” to Mr Papadimitriou, according to Westpac’s lawyer.
The proceedings originated when Westpac detected a “significant potential fraud” related to a portfolio of equipment leases with the bank’s customers arranged by Forum Finance, which were referred to Westpac’s institutional bank.
The bank disclosed to the market in early July that it had an exposure of approximately $200 million as a result of the alleged fraudulent loans.
The case is next listed for hearing in October, with the proceedings of the three banks to be managed together.
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