Five Star's related-parted balance was growing, which Dickey said was a problem for Williams and the group's listed directors.
"The new entity [Antares] would have audit requirements, the old entity did not. There was a risk these loans would be identified by any such audits as related party and heavily impaired - they needed to be laundered," Dickey said.
In order to raise capital for this purchase of FSCF, Antares tried and failed to raise funds from the public through an issue of redeemable preference shares, Dickey said.
But this was "hopelessly undersubscribed" and created an issue for Five Star's principals, who needed capital to discharge "toxic related party loans and have failed to successfully raise it through the Antares public offer".
Dickey said Williams planned and effected - with Five Star's board - a "transactional scheme" where $14.2 million was advanced from FSCF to six friends or associates of the accused or the group's managing director, Nicholas Kirk.
These six "borrowers" then subscribed for and were issued the redeemable preference shares in Antares, which paid the money to FSF. FSF then paid the $14.2 million back to FSCF to "discharge various related party debts", with funds that originated from FSCF.
"The redeemable preference share transaction was as uncommercial as can be imagined," Dickey said. "There was no prudency or commerciality in using investor funds to fund [FSCF's] own purchase and discharge debts owed to it by related parties and replace the same with non-recourse, unenforceable loans with worthless security".
Companies in collapsed Five Star group
*Five Star Finance (FSF).
*Five Star Consumer Finance (FSCF).
*Five Star Debenture Nominee.
*Antares Finance Holdings.
*Amount still owing: More than $85 million.
