A PUBLIC examination into the bankruptcy of the banned liquidator Stuart Ariff descended into a long legal brawl yesterday as the barrister representing Mr Ariff’s sister Yazni Ariff tried to prevent questions she said could expose her client to a criminal investigation.

Rachel Francois said any such investigation could be fully answered, but her client should not be subjected to the embarrassment of public questioning in the Federal Magistrates Court on a matter ”of an incredibly serious kind”.

Ms Francois repeatedly objected to questions about the March 2009 sale of a commercial property in Newcastle by a company associated with Mr Ariff to a company associated with his sister.

At issue was whether Ms Ariff’s family company paid $700,000, the amount shown on land title records and the contract, or $930,000.

The court heard an earlier draft sale contract for $700,000 contained an annexure saying Ms Ariff’s company would lend the vendor a further $230,000.

Asked the ”total value of the consideration proffered to acquire the property”, Ms Ariff said $700,000.

Ms Francois said there was ”an aspect about this which indicated that the loan was in fact potentially considered consideration and there are answers to all of that but if that were so it exposes the witness to something else in another forum in another context.

”It should not be allowed that a matter which has been aired in correspondence as involving an offence should be investigated here when it just relates to Ms Ariff and has nothing to do with her brother,” she said.

Last year Mr Ariff’s bankruptcy trustee, Anthony Warner, said he intended to investigate whether the property, where Mr Ariff conducted his insolvency practice until the NSW Supreme Court banned him from the profession last year, was bought for less than its real value.

A trustee has the power to overturn such transactions for the benefit of a bankrupt’s creditors.

Mr Warner’s barrister, David Ash, said if the sale price was $930,000 and his client was satisfied that sum was received by an entity associated with Mr Ariff, ”then, vamoose, there’s no concern to anyone”.

Ms Francois said the evidence showed there could be no benefit to creditors from investigating the sale, but public questions about whether it involved a ‘’sham element” were aimed at the ”improper purpose” of embarrassing her client.

Ms Ariff, an accountant, worked as a consultant to her brother’s insolvency practice in Newcastle.

Mr Ariff was banned for life after he admitted to misappropriating funds and other misconduct in 16 liquidations and voluntary administrations.

He was bankrupted after the court ordered him to pay $4.9 million in compensation to creditors of those 16 companies.

by ELISABETH SEXTON