A high-profile Indian-origin couple today launched 1.5 billion dollar lawsuit, one of the biggest in Australia’s legal history, against ANZ bank for allegedly undervaluing shares of their fertiliser company to recoup millions in debts.
The case launched by Pankaj and Radhika Oswal in the Supreme court of Victoria is the biggest in the legal history of Victoria and revolves around the forced sale of the Oswals’ Western Australian-based company Burrup Fertilisers after it was seized by receivers in 2010.
The Oswal couple has alleged that Australia and New Zealand Banking Group (ANZ) and the receiver PPB undervalued their share of the chemical business by 1.5 billion dollars.
The ANZ brought in receivers to the Burrup group of companies in 2010 and the Oswals argue their 65 per cent stake in Burrup Holdings was undersold in 2012.
They argue that their stake in Burrup was sold on the cheap to cover a 900 million dollar loan from ANZ instead of for the 2.5 billion dollars they say it was worth.
Tony Bannon from the Oswal’s defence team said the couple was entitled to a judgement against the bank and receivers in excess of 1.5 billion dollars.
The Oswals had borrowed over 800 million dollars from ANZ. They claimed that the receivers sold the plant for 800 million dollars below its value but just enough to repay ANZ’s debt.
Oswal is also suing ANZ for alleged bullying.
According to media reports, the court heard today that the value of the compensation rose to 2.5 billion dollars if the sale agreement was set aside and the shares were ordered to be divested, taking into account their current value.
Bannon said the receivers and ANZ made it clear that their purpose was simply to clear Oswal’s debt, and effectively disclosed the reserve price to potential bidders.
“Not only was it a breach of selling any asset rule 101, as it turns out it’s a breach of a duty of a receiver,” Bannon said, adding that the receivers “effectively did ANZ’s bidding.”
The legal battle has already seen millions of dollars spent with over 25 barristers in court today.
Openings in the trial are expected to last three weeks, with the trial itself expected to last up to six months.
Meanwhile, the couple is also accused of misappropriating 150 million dollars from the fertiliser company for personal use.
The Oswals left Australia in December 2010, when receivers were appointed to Burrup, and only recently returned to be in Melbourne for the court case.
As owners of Burrup Fertilisers, Oswals became part of the WA champagne set, building an enormous home on the banks of the Swan River in Peppermint Grove (WA’s most affluent suburb), nicknamed by locals as the Taj on Swan.
That home, a half-built enterprise estimated to have a total cost of 70 million dollars, will be demolished at taxpayer expense.