Lachlan Murdoch testifies in One.Tel trial

James Packer broke down in tears and told Lachlan Murdoch he was sorry just days before the collapse of junior telco One.Tel, a court has been told.

Mr Murdoch has been questioned in the NSW Supreme Court about a private meeting he had at his home with Mr Packer on May 27, 2001, a few days before the telco went into voluntary administration on May 30.

Mr Murdoch was asked if by the end of that private meeting, held in the kitchen of his Sydney home, Mr Packer was crying.

"Yes," Mr Murdoch replied.

He also was asked if Mr Packer was saying he was sorry.

"Yes," Mr Murdoch replied.

Counsel for Jodee Rich, David Williams, also asked Mr Murdoch if Mr Packer said his father Kerry Packer was angry with him, to which Mr Murdoch replied "no".

The court was told that the private discussion was one of three meetings at Mr Murdoch's house that day with News Ltd and Publishing and Broadcasting Ltd (PBL) representatives.

News Ltd and PBL were investors in One.Tel.

Mr Murdoch is giving evidence in the corporate regulator's civil case against One.Tel founder Mr Rich and finance director Mark Silbermann.

The court earlier heard that Mr Packer persuaded Mr Murdoch over a dinner for two that One.Tel could be a good investment for News Ltd.

Mr Murdoch was dining at Mr Packer's house in 1999 when he first heard of the junior telco.

"We began dinner talking about telecommunications in general," Mr Murdoch told the court.

Asked if Mr Packer had said that One.Tel would be a good investment for News Ltd, Mr Murdoch replied: "Yes, he did."

Mr Rich and Mr Silbermann are being sued for A$92 million ($99m) million by the Australian Securities and Investments Commission (ASIC) over the telco's May 2001 collapse.

Mr Murdoch has been called as a witness because he was a director of the telco when it went into administration, as a representative of major One.Tel shareholder News Ltd.

Fellow former One.Tel director Mr Packer, who is executive chairman of his father Kerry Packer's Publishing and Broadcasting Ltd (PBL), will give evidence in the hearing next week.

- AAP