Packer, Murdoch face $232 million One.Tel charge

By ninemsn Money staff and AAP

James Packer and Lachlan Murdoch could be forced to pay $232 million in compensation to creditors over the collapse of One.Tel.

The NSW Supreme Court yesterday ruled that the Australian Securities and Investments Commission (ASIC) had failed to prove its case against One.Tel founder Jodee Rich the company's finance director Mark Silbermann.

Justice Robert Austin ruled that One.Tel, which collapsed in 2001, may have survived if companies presided over by Mr Packer and Mr Murdoch refused to underwrite a rights issue that could have raised $132 million.

Paul Weston, the liquidator appointed to One.Tel, now wants to pursue Mr Packer and Mr Murdoch for compensation.

"It's always been my intention to pursue them vigorously," Mr Weston said.

"The next step however is to ensure that we have sufficient capital to be able to pursue that case."

Mr Weston's case will attempt to recover the $132 millon with interest of $100 million.

Justice Austin also expressed concern in his judgement with the recollections of Lachlan Murdoch, son of News Corp chief Rupert Murdoch, and Kerry Packer's son James Packer, although he did not find against the credit of their evidence.

During nine days of oral evidence, James Packer said he could not recall or remember details 1,951 times.

Lachlan Murdoch responded in a similar fashion on 881 occasions during his time in court, although Justice Austin said he was further removed from the operations of One.Tel.

"The extent of his (Mr Packer's) inability to recollect relevant events, both generally and in particular relating to the period from 18 to 28 May (2001), weakened his evidence," Justic Austin found.

"Likewise there were some difficulties with the evidence of Mr Murdoch [Junior], relating to his very poor recollection of events, but no adverse conclusion was drawn as to credit."

The corporate watchdog is at least $20 million out of pocket after losing the landmark case against the Mr Rich.

Eight years after the Australian Securities and Investments Commission (ASIC) launched the legal action, the NSW Supreme Court on Wednesday comprehensively dismissed its allegations.

"I have reached the conclusion that ASIC has failed to prove any aspect of its pleaded case against either defendant,"

ASIC now faces the likelihood of costs being awarded against it, potentially lifting its losses on the case by another $15 million, although it is still to decide whether to appeal the 3,105-page judgement.

In the document, published digitally, Justice Robert Austin also dropped another bombshell saying said the telco would likely have survived if a proposed $132 million rights issue had been able to go ahead.

Speaking outside the court after the judgement, a delighted Mr Rich said the last eight years had been tough on him and his family.

"I am so happy with the result," he said, with wife Maxine by his side.

"I feel that it will give the One.Tel creditors the facts and the data that they need now to see closure on this matter as well."

But the victory did not vindicate anyone's actions in the lead-up to the collapse of One.Tel, Mr Rich said.

"I don't think we can ever be vindicated of what happened to One.Tel," he said.

"I think that it was an extraordinary tragedy and so many people lost their jobs," he said.

"The company that we spent six years building, was so successful, was in one sense so easily put into liquidation by some very strange things that went on."

Justice Austin found ASIC's case had a "superficial appeal, but time and again they were shown to be unpersuasive when the underlying financial detail was investigated".