OZschwitz: Private Mediation On The Rise: Killer follows money trail to Singapore
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RR Phantom
Location : Wasted Space Job/hobbies : Cayman Islands Actuary
Subject: OZschwitz: Private Mediation On The Rise: Killer follows money trail to Singapore Wed Apr 09, 2008 5:55 pm
THE burly figure of Mick Gatto, the former boxer and killer of a gangland hitman turned "mediator", ambled into Singapore's glitzy Changi Airport last night, hoping to help recoup millions lost by clients of the stockbroker Opes Prime.
Mr Gatto's powers of persuasion have worked wonders in Melbourne's bars, backstreets and building sites but it remains to be seen if he can shake down the elusive world of high finance and international capital transfers.
Flanked by two bulky associates, Mr Gatto said he had a "couple of good leads" and "a couple of people to visit" in an attempt to recover $300 million lost by several Opes Prime clients who had engaged him.
First on the agenda was a visit to Opes Prime's Singapore office, he said. Hundreds of millions of dollars were channelled through the office to a British Virgin Islands company and subsequently disappeared.
Russia and the Virgin Islands were possible havens for the cash, Mr Gatto said.
"We believe we are doing a good service, and think we have every chance of recovering a vast majority of the money. The proof is in the pudding."
Asked how he planned to recover the money, Mr Gatto said: "We are going to bring it back in suitcases, several suitcases. We believe we can do a lot better than the liquidators, lawyers and banks."
The three denied they had made the trip to stand over people but Mr Gatto said: "We will do whatever it takes - within reason." He was "not at liberty" to reveal the names of his clients, he said, and warned against following him around, adding that it could prove dangerous - "not from us, of course".
Mr Gatto shot dead the hitman Andrew "Benji" Veniamin in 2004 and was later acquitted of murder on the grounds of self-defence.
His private company, Arbitrations & Mediations, has in the past been engaged to deal with feuds on Melbourne construction sites.
Location : Wasted Space Job/hobbies : Cayman Islands Actuary
Subject: Re: OZschwitz: Private Mediation On The Rise: Killer follows money trail to Singapore Wed Apr 09, 2008 5:59 pm
I'm guessing that the blokes who allegedly cooked the books at the failed stockbroking firm Opes Prime would be uncomfortable with investigations by the Australian Securities and Investments Commission, a bit concerned about various legal actions by clients, and very attentive to the actions of administrators.
But having underworld identity Mick Gatto chasing them would make them bloody scared.
He provides a new twist to corporate recovery - and probably one that those responsible for the "irregularities" in Opes would not have contemplated.
As history has shown over many years, taking money from unsuspecting retail investors has been easy. They haven't the resources to fight back and can rely only on regulators. In most cases they end up losing large parts of their investments.
But vigilante Gatto told newspapers: "These Opes Prime clients can take their chances and lose all their money to lawyers and to the receivers, or they can take their chances with me to extract a return on their behalf … the proof is in the pudding with me … I solve problems … it's my way or the highway."
And let's not beat around the bush. It's pretty clear that Gatto's clients operate in the same circles as Gatto himself. From the day this previously unknown broking firm got into trouble, the chat swirling around is that, amongst other investors, its client base may have also contained underworld and criminal elements.
While Gatto headed off yesterday to the British Virgin Islands, via Singapore, to chase the money trail, the more conventional corporate recovery specialists from Ferrier Hodgson were holding a meeting with creditors (mostly clients) telling them that the base-case recovery would be 30c in the dollar.
It is not clear whether ANZ will get all the $95 million-plus it pumped into the company in March to stave off collapse. The chances of it getting back the $919 million it lent Opes against a portfolio of shares is much better.
It's the clients - some of which have hired Gatto - that could be left out in the cold. The waters are very muddied because the nature of these client/broker relationships is complicated.
A client would borrow from Opes to buy stock. The stock ownership would pass to Opes, which would in turn borrow from the bank (in this case ANZ and Merrill Lynch), which would then get ownership of shares.
But the portfolio of stocks was bundled. Some clients still had plenty of buffer left between the value of the stock and the amount they borrowed. Others, like the well-known Sydney lawyer Chris Murphy, were underwater and should have been called to top up their loans.
Allegations have been made in Federal Court that in order to save some select clients from receiving a margin call, operatives within Opes simply used the surplus from the loans of some clients to offset the deficit in other clients' loans.
This was made possible by the fact that the loan book and the shares that were used as security were pooled. Murphy has said that he does not know what has happened to his shares.
It is not clear how Gatto or anyone else would be able to extract the funds even if he can locate them.
From the documents supplied by the administrator yesterday it appears that there are two big problem areas. There are "problem accounts" that owe the broker $128 million, and a company called Riqueza BVI (based in the British Virgin Islands) that is a net debtor to the tune of $101 million.
Riqueza, in turn, is owed $185 million by two companies, Leveraged Capital and Hawkswood Investments, and these companies are owned by the same three principals of Opes. Two of these principals, Julian Smith and Laurie Emini, have had their passports removed by order of the courts.
Meanwhile, the unfolding Opes drama stole the limelight from the troubled Sydney stockbroker Tricom, which yesterday found a bunch of investors to mount a financial rescue.
Front and centre was the investment bank Babcock & Brown, which was a creditor to the tune of $35 million. It will put up an additional $5 million while ANZ, Tricom's other major creditor, will stump up between $7.5 million and $10 million.
The management has put $5 million in the hat and clients have put in $10 million - which the firm hopes is enough to lubricate the stock loan book sufficiently to finish the job of running it off.
If it all goes according to plan, the firm will become a vanilla-flavoured broker. ANZ and Babcock & Brown have an option to convert their loans to shares in the broker.
It isn't the perfect ending to this saga. For now at least it seems that Tricom will live to fight another day. It hasn't got the Opes "irregularity" issues but its reputation is a mess. No doubt its loyal client base will continue to deal with Tricom, but there will be many in the institutional market that won't.
Location : Wasted Space Job/hobbies : Cayman Islands Actuary
Subject: Re: OZschwitz: Private Mediation On The Rise: Killer follows money trail to Singapore Wed Apr 09, 2008 6:02 pm
Is this who Gatto is looking for?
THIS is the man underworld figure Mick Gatto probably wants to talk to in Singapore about the Opes Prime collapse.
He is a Singaporean-based associate of Opes Prime, Jay Moghe. He last night told The Age that he has given Opes' administrators all documents related to the British Virgin Islands-registered company he owns that is called Riqueza BVI.
Hundreds of millions in cash and shares were channelled from Opes Prime to Riqueza BVI.
The administrators, John Lindholm and Adrian Brown of Ferrier Hodgson, have described Riqueza as the crucial link in understanding various transactions into and out of Opes.
Mr Lindholm yesterday told Opes' unsecured creditors, who are owed $514 million, that they might eventually get back 30 cents in the dollar.
Last night, Mr Moghe told The Age that Mr Gatto, who has flown to Singapore ostensibly to get money back on behalf of Opes clients, had not contacted him. "No, not yet," he said. "Someone told me about it (Mr Gatto's visit) this morning. I'm happy to talk — like I said, I've got nothing to hide.
"I certainly was not (party to these transactions). There were basically movements in and out of the account — I had no idea what they were about."
Flanked by two bulky associates at Melbourne Airport, Mr Gatto said he had "a couple of good leads" and "a couple of people to visit" in an attempt to recover $300 million lost by several Opes Prime clients who had engaged him. First on the agenda was a visit to Opes Prime's Singapore office this morning, he said.
Then could come a worldwide search for where the funds had been hidden. Russia and the Virgin Islands were possible havens for the cash, Mr Gatto said.
"We believe we are doing a good service and think we have every chance of recovering a vast majority of the money," he said on arrival. "The proof is in the pudding."
Asked how he planned to recover the money, Mr Gatto said: "We are going to bring it back in suitcases, several suitcases." The trio denied they had made the trip to stand over people, but, Mr Gatto added, "we will do whatever it takes — within reason".
Mr Gatto shot dead underworld hitman Andrew "Benji" Veniamin in 2004 and was later acquitted of murder on the grounds of self-defence.
The Federal Court in the past week has heard allegations of "systematic manipulation" of Opes clients' share trading accounts, of a shuffle of shares that shielded the six clients from margin calls, and how Opes Prime chief executive Lirim "Laurie" Emini instructed staff to manipulate the accounts.
The administrators at this stage believe the Opes directors, for reasons that are not clear, used Riqueza as a conduit for their own investments, which included shares in various listed and unlisted companies.
"The forensic work we have done … indicates that Riqueza is essentially the intermediary whereby a number of those (director-related) transactions occurred," Mr Lindholm said.
Subject: OZschwitz: Private Mediation On The Rise: Killer follows money trail to Singapore 
Wed Apr 09, 2008 5:55 pm
