Packer insists he was misled over OneTel

SYDNEY: James Packer still insists he was "profoundly misled" about the financial position of junior telco OneTel before its collapse in May 2001.

Packer maintained the position he has held since the collapse in a statement issued by Consolidated Press Holdings.

It said the casino baron "reiterated that he had been profoundly misled as to the financial position of OneTel".

It follows a landmark New South Wales Supreme Court ruling on Wednesday that found the Australian Securities and Investments Commission (Asic) had failed to prove any of its long-running case against OneTel founder Jodee Rich and its finance director, Mark Silbermann.

Asic had alleged Rich and Silbermann had failed to meet their duty of care in the months leading to the company's collapse in May 2001.

On Thursday, Packer said the Asic case was a penalty proceeding that gave significant procedural protections for the defendants.

"Rich and Silbermann could - and did - claim privilege and were not required to discover any documents in the proceedings," he said. "They also did not have to provide their evidence until after Asic closed its case."

Many documents that Asic sought to tender in the case were not admitted into evidence, Packer said.

Of the documents that were admitted, the court found that many were unclear without a proper explanation from the authors, he said.

Those authors were not called to give evidence by Asic.

"As a result, Asic could not establish that the documents proved a particular financial position.

"In other words, Rich did not positively prove OneTel's financial position, but rather Asic was not able to make out its case against Rich and Silbermann."

Packer also said claims of privilege given to Rich and Silbermann in the civil trial meant the court could not be taken to "what would appear to be significant inconsistencies between their evidence to the earlier liquidators public examinations and what they said in the Asic case".

Packer is one of several parties - including Lachlan Murdoch - still subject to a separate action by a special purpose liquidator seeking to recover funds for OneTel's creditors.

The special purpose liquidator, Paul Weston, is investigating the cancellation of a US$132 million ($181.7 million) rights issue, which was underwritten by Publishing & Broadcasting and News Ltd, shortly before OneTel's collapse.

Weston's case had a boost when the NSW Supreme Court on Wednesday dropped a bombshell saying the telco would likely have survived if the US$132 million rights issue had been able to go ahead.

Packer challenged Weston to bring on his legal stoush about the rights issue, saying the special purpose liquidator should "immediately serve the writs they have issued in the Supreme Court of NSW".

"Prompt action is essential to seek to ensure the integrity of evidence which will become a central feature of these proceedings," the CPH statement said.

Packer also called on the NSW Supreme Court to immediately order that all documents be preserved for the litigation hearings.

"CPH looks forward to arguing these cases, and to demonstrating in court the true financial position of OneTel," the statement said.

"CPH will call for discovery of all of Rich's documents.

"Rich, the SPL and their witnesses - whomever they may be - will be required to promptly file witness statements and be subject to cross- examination by us.

"CPH expects to have all material documents, including reports of financial experts, fully admitted in these cases."

- AAP