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

Payfair List of  Creditors

by Susannah Moran, The Australian

He was being questioned yesterday in the Federal Magistrates Court in Sydney by David Ash, a barrister acting for Mr Ariff’s trustee in bankruptcy, CRS Warner’s Anthony Warner.

The NSW Supreme Court banned Mr Ariff from acting as a liquidator for life and ordered him to pay $4.9m compensation. But he was later declared bankrupt, based on claims for more than $11m lodged with Mr Warner. Mr Ariff was questioned yesterday on a number of bank accounts, loans and credit card payments. He said two credit cards, whose bills totalled about $1.8m over a six-year period, could have been held by contractors to his companies, who would then claim back work-related expenses.

The court also heard of two payments totalling $20,500 made by a roof insulation business to a company associated with Mr Ariff.

“And you have no idea what these payments are for?” Mr Ash asked. “No,” replied Mr Ariff, rejecting a suggestion they were a result of Mr Ariff working as a home insulator in October.

Mr Ariff was also asked about a dishonoured $515,000 cheque drawn on his personal account in February last year. Mr Ariff said it was a lot of money but he could not recall signing the cheque, and one of his staff would have filled in the amount.

“Is it possible to say you signed a cheque for half a million dollars without regard for what you were signing?” Mr Ash asked.

“Correct,” Mr Ariff replied.

Two Australian Federal Police officers accompanied him to the court in Goulburn Street, half a kilometre from the police station in Surry Hills where he stayed the night.

The registrar, Paddy Hannigan, discharged the police but warned Mr Ariff that she did not want to issue another warrant if he absconded.

Mr Ariff is due back in court today to answer more questions as his trustee, Anthony Warner, tries to recover funds for creditors.

The largest group of creditors are yet to receive the $4.9 million Mr Ariff was ordered by the NSW Supreme Court to pay in compensation for misappropriating funds from companies of which he was the liquidator or administrator.

Yesterday, he broke down when he was asked to give his name and date of birth for the court record.

When he was handed documents relating to his financial affairs he said: ”I’m not looking through any bundle of documents today; what I’ve been through last night was amazing.”

Later he said: ”I’ve had two hours’ sleep staring at a light bulb so I’m a bit blurry”.

He also became tearful when he spoke about strains in his marriage and said he was unable to remember much of the events of 2008 and 2009 because of ”what I have been through in the last couple of months, with my mother being very sick”.

In contrast, he was forthright when answering questions about family trusts and companies involving his wife, Kathleen Clark, his parents, Yusof and Barbara Ariff, and his sister, Yazni Ariff.

Asked about claims on his bankrupt estate from relatives and their companies for hundreds of thousands of dollars, he said they were owed the money because they had paid his legal bills.

Mr Ariff was bankrupted in October, two months after Justice Patricia Bergin ordered him to pay the $4.9 million and banned him for life from the insolvency profession.

The judge said his ”appalling” misconduct included using creditors’ funds to pay for holidays and failing to pay employee superannuation.

Ms Clark and Yazni Ariff have been summonsed to appear at the examinations in August.

ELISABETH SEXTON
July 2, 2010

He broke that law by failing to appear at the Federal Magistrates Court in Sydney yesterday and on Monday, under a June 9 summons to answer questions on oath from his bankruptcy trustee, Anthony Warner, a partner of the insolvency firm CRS Warner Kugel.

Mr Ariff was bankrupted last year, after the NSW Supreme Court ordered him to pay $4.9 million in compensation for misappropriating funds from companies of which he was liquidator or administrator.

Justice Patricia Bergin also banned Mr Ariff from the insolvency profession for life after he admitted to misconduct including using creditors’ funds to pay for family holidays, lodging false accounts and failing to pay employee superannuation.

Mr Ariff is believed to be living in Melbourne and last year surrendered his passport to Mr Warner.

The warrant, issued under the Bankruptcy Act, gives the Australian Federal Police the power to bring Mr Ariff to the court for his examination and to detain him in custody.

Mr Ariff faxed the court a handwritten letter on Friday asking to be excused on medical grounds, but the only doctor’s certificate he provided was two weeks old, addressed to Centrelink and related to his capacity for work, not for attending court.

A court registrar, Geoffrey Segal, said on Monday that there was ”no clear evidence he’s unfit to give evidence and the lateness of the application [to be excused] does colour the genuineness of the application”. After giving Mr Ariff 24 hours’ grace, Mr Segal ordered the warrant yesterday.

Mr Warner’s barrister, David Ash, told the court that after Monday’s hearing his client had contacted the doctor who signed the Centrelink certificate.

”The conversations that have taken place with the doctor show … that not only does Mr Ariff not see the doctor at the moment but he has no intention of getting a medical certificate in an appropriate form,” Mr Ash said.

ELISABETH SEXTON
June 30, 2010

He faxed a copy of the Centrelink document to the court on Friday and attached a handwritten letter in which he said he had depression and was ”heavily sedated”.

A court registrar said he would issue a warrant this morning if Mr Ariff did not provide a ”new and different” medical certificate overnight.

”There’s no clear evidence he’s unfit to give evidence and the lateness of the application [to be excused] does colour the genuineness of the application,” said the registrar, Geoffrey Segal.

”If he’s unfit to give evidence he should be excused from being here but we are not at that point at the moment.”

The registrar also deferred until August the examination of Mr Ariff’s wife, Kathleen Clark, to allow her to undergo medical treatment.

Ms Clark’s solicitor, Peter Wright, told Mr Segal his client had ”an appropriate medical certificate” and a supporting sworn affidavit. The court has set aside time in August for the trustee, Anthony Warner, to examine Mr Ariff’s sister, Yazni Ariff, who worked at his firm, Stuart Ariff Insolvency Administrators.

Mr Ariff was banned from the insolvency profession for life last year after the Australian Securities and Investments Commission prosecuted him for acting against the interests of creditors during 16 liquidations and voluntary administrations.

Mr Ariff admitted the allegations, which included using creditors’ funds to pay for family holidays, lodging false accounts, improperly receiving fees from collapsed companies under his control and failing to pay employee superannuation.

Justice Patricia Bergin said his conduct was ”quite appalling” and ordered him to pay $4.9 million compensation to creditors of the 16 companies. He did not pay and was bankrupted in October.

The court set aside three days this week and one day in August.

by ELISABETH SEXTON

Just days after it became public that the corporate regulator had ended its investigation into the Offset Alpine affair, it has emerged that the Rivkin estate, controlled by bankruptcy trustees Anthony Warner and Steven Kugel, has been given the green light to pursue one of Rivkin’s Swiss bankers for making “unauthorised transactions”.

Mr Warner told The Australian yesterday that after trawling through Rivkin’s bank account details he had on Friday received news from Switzerland that he could proceed with the claim.

It is understood Australian Securities and Investments Commission chairman Tony D’Aloisio decided four weeks ago to end the legal battle to uncover who owned the parcel of Offset Alpine shares that soared in value after a fire at the company’s Sydney printing plant in 1993.

Trevor Kennedy, a former Qantas director, was told two weeks ago of the decision and his friends believe he has been unfairly pursued and his business interests have suffered as a result of the investigation.

“It is a very sad indictment on law enforcement in Australia,” said one friend yesterday, “that someone of Trevor’s prominence has had to live the last seven years of his life in limbo, without any claim or charge being made.”

One of the longest-running investigations on ASIC’s books, the Offset Alpine investigation began in 2003 after revelations that Rivkin had told Swiss prosecutors that he, Mr Kennedy and Labor powerbroker Graham Richardson were the owners of a secret parcel of Offset Alpine shares. A fire on Christmas Eve 1993 triggered a massive insurance payment and a surge in the share price. Mr Kennedy told ASIC he knew nothing of the shareholding and Mr Richardson also denied ownership.

ASIC was looking at possible perjury charges and also civil charges into not declaring share ownership.

But in recent years ASIC has not discovered any smoking guns despite spending millions of dollars tracking down documents all around the world.

Rivkin died in 2005, Mr Richardson was no longer a serious target and ASIC homed in on Mr Kennedy.

Last November, The Australian learned that Swiss authorities had rejected Australia’s latest request for further documents. ASIC had already received a huge bundle of documents, but they did not prove anything.

The following month, court proceedings in the Isle of Man became tense when ASIC was accused of a “further major change in its position”, described as “at best, highly confused, inconsistent and deeply unsatisfactory”.

The Australian has uncovered some sympathy for ASIC in the English courts, with a judge saying last year “it is a total disgrace that as a result of Mr Hafner’s intervention in these proceedings there has been such a huge delay in the transmission of evidence to Australia for many years”. Benno Hafner was Rivkin’s Swiss lawyer.

The dropping by ASIC of the Offset Alpine investigation is viewed by some in the business community as a shrewd decision.

After the losses in the One.Tel and Fortescue Metals cases, ASIC took a long look at Offset.

Mr D’Aloisio has restructured the litigation department since his appointment and worked hard to secure insider trading and market manipulation charges.

Yesterday, one observer said of his decision: “He has had the courage to do what is correct.”

by Susannah Moran, The Australian, May 31, 2010 12:00AM

Photograph of Stuart Karim Ariff – as published by the Sydney Morning Herald – 1 April 2010

THE rogue Newcastle liquidator banned for life by a NSW court is facing pressure from a Senate inquiry into the industry to front a hearing that would put him face-to-face with many of his victims.

Stuart Ariff has been requested to appear before the Senate economics committee at its April 14 sitting in Newcastle. But Mr Ariff, who was given a life ban last year for failing to faithfully perform his duties in 16 liquidations, is expected to be reluctant to appear.

The Nationals senator John Williams, who initiated the inquiry, said the committee had the power to summons him and he could be found in contempt of the Senate if he did not appear.

”My advice to Stuart Ariff is that he should show up or he can be very confident the committee will take a stronger arm with him,” Senator Williams said.

The highest-profile liquidation Mr Ariff was involved in was Carlovers, in which he spent about $10 million on the administration of the company that had about $4.5 million owing.

”It’s just bloody outrageous,” Senator Williams said.

”Ariff’s taken his wife and kids overseas on money that he got from selling off assets for companies. There’s going to be a lot of questions put to Ariff, like where the hell has all the money gone now he’s bankrupt?”

As part of the administration of the company, Mr Ariff rode in limousines and went to luxury resorts.

Several people involved in companies liquidated by Mr Ariff have made submissions to the Senate inquiry. Among them was Bernard Wood, who employed 50 staff in an earthmoving business in the Hunter Valley. He claims he, his staff and creditors were subjected to ”pain and misery” by Mr Ariff.

Mr Wood claims Mr Ariff seized and sold the company’s assets, collected the debtors’ money and shared the spoils with a legal and auction company while leaving creditors without a cent and employees out of work.

”I became the victim of what I would call the sleazy world of liquidators and administrators and their associates,” he wrote.

This month the committee will have hearings in Adelaide, Sydney and possibly Melbourne. Its final report is due at the end of August.

by ARI SHARP – smh.com.au

]]> http://www.crswarnerkugel.com.au/news/senate-scrutiny-and-victims-await.html/feed 0 http://www.crswarnerkugel.com.au/news/liquidator-stuart-ariff-to-face-public-examination.html http://www.crswarnerkugel.com.au/news/liquidator-stuart-ariff-to-face-public-examination.html#comments Sat, 23 Jan 2010 12:24:34 +0000 admin http://www.crswarnerkugel.com.au/?p=497 DISGRACED liquidator Stuart Ariff will face public examinations over controversial dealings involving various companies.

It is the first time Mr Ariff will face formal questioning in court, following a settlement he reached with the corporate regulator in August.

The corporate regulator, the Australian Securities & Investments Commission, disqualified Mr Ariff from acting as a liquidator for life, and he agreed to a $4.9 million compensation order.

But he was later declared bankrupt, with claims for more than $11m lodged with his trustee. His estate had assets of just $30,000, which was not enough to fund a public examination.

Yesterday, Mr Ariff’s trustee in bankruptcy, Warner Kugel’s Anthony Warner, said the examination could go ahead thanks to funding from the Insolvency Trustee Service Australia.

Mr Warner said the body “clearly appreciates the seriousness of the allegations concerning Mr Ariff”.

Mr Warner said questions would focus on Mr Ariff’s business operations and why he had disclosed no significant assets in his statement of affairs.

By Susannah Moran, The Australian

January, 23, 2010