Long One.Tel saga not quite over yet

Despite the extreme relief on Jodee Rich's face as he stood outside the NSW Supreme
Court this week, the almost decade-long One.Tel saga may be anything but over.
As the Australian Securities and Investments Commission (ASIC) counts the cost of
its failed case against Mr Rich and One.Tel finance director Mark Silbermann, other
big players in the stoush remain determined to clear their names.
And in James Packer and Lachlan Murdoch, you don't get much bigger.
James Packer became one of the original shareholders in One.Tel when it was
established in 1995 by Mr Rich and his colleague Brad Keeling.
Later, Mr Packer introduced his father Kerry Packer's Publishing and Broadcasting
Ltd (PBL) and Rupert Murdoch's News Corp to the telco business.
When One.Tel collapsed, PBL and News lost a combined $1 billion.
Both James Packer and Lachlan Murdoch, who were One.Tel non-executive directors,
have maintained since the collapse that they were profoundly misled about the
telco's financial situation.
PBL and News were to underwrite a $132 million rights issue by One.Tel in early
2001, but the fundraiser was cancelled as the company's independent directors
believed it was not enough money to keep the telco going.
It is this abandoned rights issue on which possible future legal action may turn.
Mr Rich and special purpose liquidator Paul Weston have filed separate cases against
PBL, News and other involved parties, but are yet to serve the writs issued as a
result.
Their mooted cases appeared to receive a boost in the NSW Supreme Court's judgment
on Wednesday.
Justice Robert Austin accepted evidence from Mr Rich that the raising and major
shareholder support would probably have seen One.Tel survive until November 2001, at
which point a more healthy cash flow may have been generated by the company.
"The withdrawal of that support, and the abandonment of the rights issue, may well
have ensured that the company could not survive," Justice Austin said in his
judgment.
Mr Packer and Mr Murdoch remain defiant.
News Ltd said on Wednesday that the judgment in the case brought by ASIC "in no way
invalidates the legitimate concerns we had at the time".
Through a statement issued by his Consolidated Press Holdings Ltd the next day, Mr
Packer urged other One.Tel litigants to commence their action.
"CPH looks forward to arguing these cases, and to demonstrating in court the true
financial position of One.Tel," the statement said.
Mr Weston is seeking funding for his damages claim, developments on which are
expected in coming weeks.
"I've got a job to do and I'm getting on with it," he told AAP on Friday.
Mr Rich has indicated his win against ASIC has given him new energy to endeavour to
get all parties to come to an agreement on compensation for One.Tel creditors.
"Woke up this morning knowing how lucky I am to live in a country where an
individual can climb a v big mtn and win against Govt and Big Biz," he wrote on his
Twitter account the day after the judgment.
Spending tens of millions on legal fees is not his preferred option.
Indeed, the prospect of further time in court would surely be daunting for the
49-year-old.
The ASIC trial dragged on for just under three years, Mr Rich present on most days
studiously taking notes on a laptop.
The self-described "battle-seasoned CEO" said it was a time full of "very dark
periods", none darker than his three weeks in the witness box.
Mr Packer and Mr Murdoch, too, would not relish a quick return to the witness box.
Both drew criticism from Justice Austin for their performances in the ASIC case in
2005.
During nine days of oral evidence, Mr Packer said on at least 1,951 occasions that
he could not recall or remember details.
Mr Murdoch responded in a similar fashion on 881 occasions during his shorter
appearance in court, a "higher daily rate" than Mr Packer, Justice Austin
calculated.
Both also would have been embarrassed by the leak of private conversations between
the pair and their families in the tumultuous period leading up to One.Tel's
collapse.
Best known is a conversation between them in Mr Murdoch's kitchen just days before
One.Tel's collapse.
"By the end of the conversation, Mr Packer was in tears," Mr Murdoch told the court
in the ASIC case.
Evidence also was heard that Kerry Packer kept a close eye on One.Tel's performance
leading up to its eventual collapse, even as he went in and out of hospital in early
2001 after a kidney transplant.
James Packer could not recall his father complaining to Mr Rich with the words: "You
blokes don't tell me anything. You treat me like a mushroom."
But Mr Packer did concede: "It's got a familiar tone to it."
In response to this week's ASIC case judgment, Mr Packer suggested the procedures of
civil trials meant the case had been weighted towards the defendants, and that
future litigation might reveal a more accurate picture of One.Tel's finances.
He said the NSW Supreme Court should order immediately that all documents in the
case be preserved for future litigation.
Whether he, or anyone involved, is ready to go through another arduous court action
is unknown.
But there'll be plenty watching.