The Australian Financial Review

www.afr.com l Tuesday 13 July 2010 FEATURES 61

Swiss return fire over ASIC claim

W
hen the corporate regulator’s
seven-year investigation into
Sydney businessman Trevor
Kennedy collapsed in May,
Swiss secrecy and unco-
operative authorities were quickly blamed.
For the Australian Securities and Investments
Commission it was a convenient excuse and
one that could not easily be challenged.
But Swiss experts, angry about the slight,
have spoken out and said ASIC’s incompetence
was the cause, not banking secrecy laws.
Speaking out for the first time, Claudia
Suter from the Zurich State Attorney’s office,
said Swiss authorities had been proactive and
transferred thousands of documents to ASIC
over the four years until November last year.
The Australian Financial Review has also
obtained new documents relating to the
matter, including trading records of an
account held for Kennedy at Swiss finance
institute EBC Zurich, which establish his
ownership of Offset Alpine shares.
The bank statement, for Brampton
Holdings Ltd, shows a $2.9 million credit for
the sale of Offset Alpine shares in January
1996. It also shows Kennedy trading in
Sunshine Broadcasting stock, despite it being
the subject of a takeover bid and him being
chairman. Kennedy has previously said he did
not control Brampton or even know what it
was investing in.
This Offset Alpine transaction is most
significant, however, as ASIC’s probe into
Kennedy, deceased stockbroker Rene Rivkin
and former federal minister Graham
Richardson centred on a secret 38.5 per cent
stake in the printing company.
The ASIC probe followed revelations in the
AFR in October 2003 that Rivkin had told
Swiss authorities under oath that he, Kennedy
and Richardson were the ultimate owners of
the stake, which was held partially through
Bank Leumi le Israel (Switzerland) and EBC
Zurich. It came to light after a Swiss fraud
investigation into private banker Ernst Imfeld,
who acted for clients including Rivkin.
The testimony provided an answer to one of
the most enduring mysteries in corporate
Australia – who owned the 38.5 per cent
stake in Offset Alpine? Both Rivkin and
Kennedy had denied under oath in 1995
Swiss authorities claim it is ASIC – not them – that is responsible for the
bungled investigation into the Offset Alpine affair, writes Shraga Elam.
knowing who ultimately owned the stake.
Rivkin’s revelation left the pair open to
perjury charges, while Richardson had to face
only the tax authorities, as he was never
questioned by ASIC.
The ASIC investigation followed unusual
share trading in Offset Alpine before and
after its printing plant burned down on
Christmas Eve in 1993.
After the fire it emerged that the plant was
insured for $53 million, despite the equipment
being valued at just $4 million. As the late
Kerry Packer said, “It was a very good fire.”
The unusual trading activity prompted
ASIC to unsuccessfully attempt to stop the
proceeds of the insurance payout and
subsequent share buyback from
leaving the country through action
in the Federal Court.
Ten years after the fire, following
the AFR’s report, ASIC reopened its
investigation into Offset Alpine.
The new documents obtained by
the AFR show Kennedy did benefit
from the insurance windfall after
the fire on Christmas Eve.
The document, which ASIC
received in December 2005,
strengthens the claim of
Swiss legal experts
who believed the
corporate
regulator had
sufficient
evidence
Rene Rivkin’s death in 2005 put an end to a perjury investigation.
to bring perjury charges against Kennedy.
The experts cite Leumi banker Ernst Imfeld
stating under oath on March 11, 2002:
“Trevor Kennedy had two accounts by me.
One of them ran under the name Trevor
Kennedy and the other one under the name
Brampton.” Kennedy switched his business
from EBC to Leumi in early 1999.
And Kennedy himself named the Brampton
account when giving evidence in Switzerland
in March 2002.
“The first account was opened under the
name Brampton International Company. The
second account was opened under my own
name, but I am not 100 per cent sure about
it,” Kennedy said.
Further evidence of
Kennedy’s links to the
Brampton account containing
the Offset Alpine shares at
EBC is to be found in the
index of the documents
delivered to ASIC by
Zurich’s then state attorney,
Ivo Hoppler, in December
2005. He stated that
Kennedy was the ultimate
owner of the Brampton
Holdings account at
EBC.
The Swiss also
claim to be
“perplexed”
and angry
about ASIC’s
Photo: FIONA LEE­QUIMBY
comments about their obstruction and say
they might affect any further co-operation
between the two countries. From the start
ASIC also appears to have misunderstood
how the Swiss legal system functioned and in
the end quit, saying it was all too hard.
Blaming Swiss banking secrecy and the
lack of co-operation was a convenient out. But
as Swiss legal experts have repeatedly pointed
out, such secrecy provisions do not apply to a
criminal matter like perjury. And the Swiss
authorities have been at pains in recent weeks
to point out their level of co-operation.
One example was the move in December
2003 to freeze the Swiss accounts of Rivkin,
Swiss legal experts believe
ASIC had sufficient
evidence to bring perjury
charges against Kennedy.
Kennedy and Richardson. This was done
without a request from ASIC, as the Swiss
believed the accounts may have contained the
proceeds of an insurance fraud.
This action was taken by Hoppler, who was
later criticised by a lawyer for the three
Australians for being overly vigorous in
pursuit of documents and other evidence.
Another example of Swiss co-operation
came after Rivkin’s death in May 2005.
Despite his suicide putting an end to any
perjury investigation, the Swiss courts say
they still forwarded dozens of boxes of
documents relating to the Offset Alpine affair.
These decisions were taken by the Federal
Court and High Court in Zurich, despite
strong objections from lawyers representing
Kennedy and Richardson.
ASIC has also been criticised by Swiss
authorities for its curious decision not to
interview Imfeld, the Swiss banker who acted
for Kennedy, Rivkin and Richardson.
Suter has indicated she would have
interviewed Imfeld for ASIC, who could name
Kennedy as the beneficial owner the Offset
Alpine shares.
ASIC did not respond to calls from the AFR.

Empty handed
How ASIC’s long pursuit came to nought
1993
Dec 24: Fire destroys Offset Alpine’s
printing plant in Sydney, providing an
insurance windfall as presses were insured
for $42m rather than their $3m book value
1995
May-June: Rene Rivkin and Trevor Kennedy
tell ASC investigators under oath they do
not know the identity of investors behind
Swiss holdings in Offset Alpine
2001
Jan 4: Bank Leumi uncovers losses of
$300m from some accounts
Jan 8: Graham Richardson visits Zurich
2002
Mar 11: Kennedy gives evidence to Zurich
DA about embezzlement by his portfolio
manager Ernst Imfeld
Dec 10: Rivkin goes to Switzerland and, in
sworn testimony to Zurich
DA, states Offset Alpine
shares frozen by ASC were
owned by him, Kennedy
and Richardson
2003
February 4: Kennedy tells
Zurich court hearing he
made $6m loan to Rivkin
during Offset Alpine
inquiry
Oct 30: The Australian
Financial Review reveals
Rivkin, Kennedy and
Richardson as the owners of the Offset
stake, sparking a formal investigation
Oct 31: Kennedy flies to London en route to
Zurich to meet Swiss lawyer Benno Hafner,
makes notes on Ritz Hotel pad
Nov 13: ASIC raids homes and offices of
Rivkin, Kennedy and Richardson
Nov 17: Kennedy resigns all his company
directorships including Qantas and Oil
Search, claiming ASIC probe might harm
the companies
Dec 1: ASIC examines Kennedy about his
Swiss accounts
2004
Jan 22: ASIC seeks copies from Swiss
The burnt-out
Offset Alpine
building
authorities of Rivkin’s Dec 2002 interviews
Mar 26: Kennedy loses legal privilege claim
over Ritz note
May 6: Kennedy loses bid to ban ASIC
access to computer hard drive
Jun 17: Richardson declares: “I never
owned the shares. I never owned the bank
account”
2005
May 1: Rivkin commits suicide
June: The High Court of Canton Zurich rules
that key Swiss documents can be sent to
Australian authorities
Nov 1: ATO issues Richardson with
amended tax assessment for 1998, the year
in which he transferred $1.4m to a Swiss
bank account
Dec 22: Swiss Federal Court orders Zurich
DA Ivo Hoppler to send Swiss banking
records of Rivkin, Kennedy and Richardson
to Australian authorities
2006
Jan 5: ASIC receives 12 folders of material,
mostly in German
Apr 3: Rivkin’s former driver Gordon Wood
arrested in London for the alleged murder of
his girlfriend Caroline Byrne on June 7,
1995, the night after Rivkin and Wood had
fronted ASC about the owners of the Offset
shares
July 19: Richardson appeals ATO
assessment of $2.3m for failing to declare
$1.4m paid into a Swiss bank account that
he controlled
Nov 7: Rivkin’s family appoints a
bankruptcy trustee to his estate after ATO
claims $30m in back taxes
Nov 17: Richardson admits he obtained
money from Swiss banks between
1997-2001 but denies a $1.4m account
that provided the money belonged to him
2007
Jul 5: Rivkin family makes $3m settlement
to bankruptcy trustee for estate to avoid
public examination and legal challenge to
Gayle Rivkin’s separation agreement
Nov 23: Richardson tax hearing expected to
set date for trial in first half of 2008
2008
October: Richardson settles his $2.3m
dispute with the ATO. Details are
confidential, each side pays its own court
costs
Nov 21: Wood found guilty of the murder of
Caroline Byrne.
Dec 4: Wood jailed for 17 years and four
months for Byrne’s murder.
2010
May: ASIC drops inquiry into Kennedy. The
decision also means Richardson is no
longer under investigation.
SOURCE: AFR

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