The Australian Financial Reviewwww.afr.com l Tuesday 13 July 2010 FEATURES 61

Swiss return fire over ASIC claimW hen the corporate regulator’s

seven-year investigation intoSydney businessman TrevorKennedy collapsed in May,Swiss secrecy and unco-

operative authorities were quickly blamed.For the Australian Securities and InvestmentsCommission it was a convenient excuse andone that could not easily be challenged.

But Swiss experts, angry about the slight,have spoken out and said ASIC’s incompetencewas the cause, not banking secrecy laws.

Speaking out for the first time, ClaudiaSuter from the Zurich State Attorney’s office,said Swiss authorities had been proactive andtransferred thousands of documents to ASICover the four years until November last year.

The Australian Financial Review has alsoobtained new documents relating to thematter, including trading records of anaccount held for Kennedy at Swiss financeinstitute EBC Zurich, which establish hisownership of Offset Alpine shares.

The bank statement, for BramptonHoldings Ltd, shows a $2.9 million credit forthe sale of Offset Alpine shares in January1996. It also shows Kennedy trading inSunshine Broadcasting stock, despite it beingthe subject of a takeover bid and him beingchairman. Kennedy has previously said he didnot control Brampton or even know what itwas investing in.

This Offset Alpine transaction is mostsignificant, however, as ASIC’s probe intoKennedy, deceased stockbroker Rene Rivkinand former federal minister GrahamRichardson centred on a secret 38.5 per centstake in the printing company.

The ASIC probe followed revelations in theAFR in October 2003 that Rivkin had toldSwiss authorities under oath that he, Kennedyand Richardson were the ultimate owners ofthe stake, which was held partially throughBank Leumi le Israel (Switzerland) and EBCZurich. It came to light after a Swiss fraudinvestigation into private banker Ernst Imfeld,who acted for clients including Rivkin.

The testimony provided an answer to one ofthe most enduring mysteries in corporateAustralia – who owned the 38.5 per centstake in Offset Alpine? Both Rivkin andKennedy had denied under oath in 1995

comments about their obstruction and saythey might affect any further co-operationbetween the two countries. From the startASIC also appears to have misunderstoodhow the Swiss legal system functioned and inthe end quit, saying it was all too hard.

Blaming Swiss banking secrecy and thelack of co-operation was a convenient out. Butas Swiss legal experts have repeatedly pointedout, such secrecy provisions do not apply to acriminal matter like perjury. And the Swissauthorities have been at pains in recent weeksto point out their level of co-operation.

One example was the move in December2003 to freeze the Swiss accounts of Rivkin,

Kennedy and Richardson. This was donewithout a request from ASIC, as the Swissbelieved the accounts may have contained theproceeds of an insurance fraud.

This action was taken by Hoppler, who waslater criticised by a lawyer for the threeAustralians for being overly vigorous inpursuit of documents and other evidence.

Another example of Swiss co-operationcame after Rivkin’s death in May 2005.Despite his suicide putting an end to anyperjury investigation, the Swiss courts saythey still forwarded dozens of boxes ofdocuments relating to the Offset Alpine affair.These decisions were taken by the FederalCourt and High Court in Zurich, despitestrong objections from lawyers representingKennedy and Richardson.

ASIC has also been criticised by Swissauthorities for its curious decision not tointerview Imfeld, the Swiss banker who actedfor Kennedy, Rivkin and Richardson.

Suter has indicated she would haveinterviewed Imfeld for ASIC, who could nameKennedy as the beneficial owner the OffsetAlpine shares.

ASIC did not respond to calls from the AFR.

Swiss authorities claim it is ASIC – not them – that is responsible for thebungled investigation into the Offset Alpine affair, writes Shraga Elam.

The burnt-outOffset Alpine

building

SOURCE: AFR

How ASIC’s long pursuit came to noughtEmpty handed

1993Dec 24: Fire destroys Offset Alpine’sprinting plant in Sydney, providing aninsurance windfall as presses were insuredfor $42m rather than their $3m book value

1995May-June: Rene Rivkin and Trevor Kennedytell ASC investigators under oath they donot know the identity of investors behindSwiss holdings in Offset Alpine

2001Jan 4: Bank Leumi uncovers losses of$300m from some accountsJan 8: Graham Richardson visits Zurich

2002Mar 11: Kennedy gives evidence to ZurichDA about embezzlement by his portfoliomanager Ernst ImfeldDec 10: Rivkin goes to Switzerland and, insworn testimony to ZurichDA, states Offset Alpineshares frozen by ASC wereowned by him, Kennedyand Richardson

2003February 4: Kennedy tellsZurich court hearing hemade $6m loan to Rivkinduring Offset AlpineinquiryOct 30: The AustralianFinancial Review revealsRivkin, Kennedy and

Richardson as the owners of the Offsetstake, sparking a formal investigationOct 31: Kennedy flies to London en route toZurich to meet Swiss lawyer Benno Hafner,makes notes on Ritz Hotel padNov 13: ASIC raids homes and offices ofRivkin, Kennedy and RichardsonNov 17: Kennedy resigns all his companydirectorships including Qantas and OilSearch, claiming ASIC probe might harmthe companiesDec 1: ASIC examines Kennedy about hisSwiss accounts

2004Jan 22: ASIC seeks copies from Swiss

authorities of Rivkin’s Dec 2002 interviewsMar 26: Kennedy loses legal privilege claimover Ritz noteMay 6: Kennedy loses bid to ban ASICaccess to computer hard driveJun 17: Richardson declares: “I neverowned the shares. I never owned the bankaccount”

2005May 1: Rivkin commits suicideJune: The High Court of Canton Zurich rulesthat key Swiss documents can be sent toAustralian authoritiesNov 1: ATO issues Richardson withamended tax assessment for 1998, the year

in which he transferred $1.4m to a Swissbank accountDec 22: Swiss Federal Court orders ZurichDA Ivo Hoppler to send Swiss bankingrecords of Rivkin, Kennedy and Richardsonto Australian authorities

2006Jan 5: ASIC receives 12 folders of material,mostly in GermanApr 3: Rivkin’s former driver Gordon Woodarrested in London for the alleged murder ofhis girlfriend Caroline Byrne on June 7,1995, the night after Rivkin and Wood hadfronted ASC about the owners of the Offsetshares

July 19: Richardson appeals ATOassessment of $2.3m for failing to declare$1.4m paid into a Swiss bank account thathe controlledNov 7: Rivkin’s family appoints abankruptcy trustee to his estate after ATOclaims $30m in back taxesNov 17: Richardson admits he obtainedmoney from Swiss banks between1997-2001 but denies a $1.4m accountthat provided the money belonged to him

2007Jul 5: Rivkin family makes $3m settlementto bankruptcy trustee for estate to avoidpublic examination and legal challenge toGayle Rivkin’s separation agreementNov 23: Richardson tax hearing expected toset date for trial in first half of 2008

2008October: Richardson settles his $2.3mdispute with the ATO. Details areconfidential, each side pays its own courtcostsNov 21: Wood found guilty of the murder ofCaroline Byrne.Dec 4: Wood jailed for 17 years and fourmonths for Byrne’s murder.

2010May: ASIC drops inquiry into Kennedy. Thedecision also means Richardson is nolonger under investigation.

Rene Rivkin’s death in 2005 put an end to a perjury investigation. Photo: FIONA LEE­QUIMBY

knowing who ultimately owned the stake.Rivkin’s revelation left the pair open to

perjury charges, while Richardson had to faceonly the tax authorities, as he was neverquestioned by ASIC.

The ASIC investigation followed unusualshare trading in Offset Alpine before andafter its printing plant burned down onChristmas Eve in 1993.

After the fire it emerged that the plant wasinsured for $53 million, despite the equipmentbeing valued at just $4 million. As the lateKerry Packer said, “It was a very good fire.”

The unusual trading activity promptedASIC to unsuccessfully attempt to stop theproceeds of the insurance payout andsubsequent share buyback fromleaving the country through actionin the Federal Court.

Ten years after the fire, followingthe AFR’s report, ASIC reopened itsinvestigation into Offset Alpine.

The new documents obtained bythe AFR show Kennedy did benefitfrom the insurance windfall afterthe fire on Christmas Eve.

The document, which ASICreceived in December 2005,strengthens the claim ofSwiss legal expertswho believed thecorporateregulator hadsufficientevidence

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 TrevorKennedy and the other one under the nameBrampton.” Kennedy switched his businessfrom EBC to Leumi in early 1999.

And Kennedy himself named the Bramptonaccount when giving evidence in Switzerlandin March 2002.

“The first account was opened under thename Brampton International Company. Thesecond account was opened under my ownname, but I am not 100 per cent sure about

it,” Kennedy said.Further evidence of

Kennedy’s links to theBrampton account containingthe Offset Alpine shares atEBC is to be found in theindex of the documentsdelivered to ASIC byZurich’s then state attorney,Ivo Hoppler, in December2005. He stated thatKennedy was the ultimateowner of the Brampton

Holdings account atEBC.

The Swiss alsoclaim to be

“perplexed”and angry

about ASIC’s

Swiss legal experts believeASIC had sufficientevidence to bring perjurycharges against Kennedy.

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