TWO company directors accused of duping a couple in their 60s into trading their multi-million dollar farming property for worthless shares were victims of the same business deal gone bad, Brisbane Supreme Court heard yesterday.
Rahoul Ray and Erwin Walter Filler were directors of Coburg AG, a subsidiary of Nexis Holdings and they are facing eight counts of fraud each.
Their trial began yesterday.
The Crown alleges the pair dishonestly induced the van Zettens to make payments of $900,000 to the Commonwealth Bank and more than $1 million in stamp duty, among others.
Crown Prosecutor Jason Robson told the court the two directors had induced Noosa Heads couple Wilhelmus and Maureen van Zetten into the sale of Yalanga Station by presenting themselves as directors of a substantial company and offering to pay for half the negotiated $14 million deal in company shares.
The van Zetten family's Suncoast Pastoral Company previously received over $5 million towards the purchase of Yalanga in regards to the deal. The $5 million went to paying down bank debt.
Mr Robson said the directors gave them reason to believe Nexis floated on the stock exchange with the issue of one billion shares at 10 euro cents and had risen to about 1.05 euros. He said Mr van Zetten was told about discussions, negotiations or significant contracts in China and that Nexis was in the process of constructing factories worldwide.
"You can appreciate they were big numbers being suggested to Mr van Zetten," Mr Robson told the court yesterday.
"He was told the shares were valuable and the shares would increase significantly, to about 4 or 5 euros by the end of year, and 10 euros in five years."
However, Mr McGuire, part of the defence panel for Mr Ray and Mr Filler, told the jury they needed to consider why the van Zettens entered into the deal they did with Nexis.
"Was it because of the false representations made to them?" he asked.
"Was it because of their financial situation?"
He told the jury the van Zettens at the time of the sale owed Westpac bank $11.3 million in general debt, against which Yalanga was partly secured.
"Was it partly because of that?"
"Was it partly because in effect Mr van Zetten was willing to take a punt on some exciting new technology whilst at the same time reducing to Westpac his debt of $11.3 million by the cash component of the deal which was more than $5 million."
Mr McGuire told the jury the couple were not robbed of their nest egg.
"You'll hear they had a property in Aspen, two units at the Riparian Plaza, a canal house at Noosa, amongst other assets."
"The defence position is simply this; that this was a business deal that went wrong. The viability of Nexis was dependent on it obtaining significant funding to finance a production plant. That didn't happen, and things went bad."
He said the new technology Nexis were involved in was the conversion of recycled waste into material that could be used for affordable housing."
"I expect you'll hear Mr van Zetten acknowledge that whilst there was a significant risk to him, there was also a significant potential upside," he said.
He pointed out Mr van Zetten had paid Westpac, to whom he owed $11.3 million and to whom he was trying to reduce his debt, $30,000 for them to conduct due diligence (and examination of the Frankfurt-listed company by overseas lawyers) and Westpac accepted the shares as security for the remaining debt.
He also pointed out the falling estimates in value of the property, which had not been taken to market for some time, and that it sold for around $4 million in the possession of the Commonwealth Bank, while the van Zettens' deal had seen them delivered shares plus in excess of $5 million in cash.
"You might ask yourselves at the end of the day, who duped who?"
The trial will continue tomorrow.
- ARM NEWSDESK
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