Home > Latest News > Ferrier Hodgson Actions Questioned As They Extend Dick Smith Investigation

Ferrier Hodgson Actions Questioned As They Extend Dick Smith Investigation

Dick Smith receiver Ferrier Hodgson has sought permission to interrogate former directors and stake holders, the move has “got right up the noses” of former executives according to one source.

The receiver wants to publicly interrogate former executives who have been blamed for the $420M collapse of the retail group.

Ferrier Hodgson took control of Dick Smith on January 4 after NAB and HSBC withdrew their support at the time Dick Smith had $400 million in debts, including $135 million owing the banks.

Ferrier Hodgson partner James Stewart said the decision to apply to the Australian Securities and Investments Commission for the right to question key players in the Dick Smith drama was not about insurance claims or corporate reputations.

Stewart has told Fairfax Media it’s a process we believe we have to go through to ascertain whether sustainable claims could be made against parties,” Mr Stewart said.

In recent months the Australians Securities and Investments Commission granted Ferrier Hodgson the right to publicly question former Dick Smith directors and other individuals over what the receiver claims are “serious issues”, sparking rumblings Ferrier Hodgson was targeting individuals with directors and office holder’s liability insurance.

Among those directors are Nick Aboud and former Chairman Rob Murray.

Former executives that I have spoken to claim that Ferrier Hodgson is believed to have urged the banks to place Dick Smith into receivership, a move that is set to generate “large fees” for the Company by extending their involvement with the collapse of Dick Smith.

“The longer this goes on the longer they can rake in huge fees” said a creditor.

“They are only interested in looking after the banks and themselves because they get a lot of work from the Banks”.

Fairfax Media reported that one source said “The receiver was the one pushing the banks to put Dick Smith into receivership and I understand they assured the banks they would get their money back,” he said.

“It’s my feeling they are investigating to see if they can make a charge against directors and office holders’ insurance.

“A liquidator’s examination is very unusual, it’s normally handled by the administrators and it’s my understanding that the administrator has said it doesn’t need one.”

Banking insiders suggest Dick Smith’s lenders, National Australia Bank and HSBC, expected to recover the $135 million they are owed through the receivership but the sale campaign was unsuccessful due to what has been labelled “Mountains of junk house brand products”.

Sources close to the receiver have dismissed claims the public examinations are about targeting individuals with insurance cover, claiming the process is about unravelling whether directors or other individuals took any actions that caused or contributed to the demise of the company.

“The examinations will be very interesting … there is a view that there will be some pretty strong arguments put in relation to the conduct of certain individuals.

“That’s why they have D&O insurance, not everyone does things deliberately, sometimes people just make mistakes.”



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