ASIC cops cost of One.Tel case

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8 February 2010

The Australian Securities and Investments Commission (ASIC) has been ordered to pay more than $14 million in legal costs after losing its case against former directors of One.Tel.

The NSW Supreme Court on Friday made orders as to the legal costs in the civil penalty and related proceedings dating back to 2001.

The proceedings comprised two actions, relating to former One.Tel MD Jodee Rich and former Finance Director Mark Silbermann, in addition to other related parties.

ASIC alleged the two men misled the One.Tel board about the company’s true financial position and breached their duties as directors by not ceasing to trade in February 2001, three months before the company went into administration.

The Supreme Court dismissed the case ruling an investigation of underlying financial detail was unpersuasive.

ASIC must now pay Mr Rich $9,622,000 in costs plus $4,178,000 in interest. His wife Maxine receives $70,421, while Mr Silbermann will be paid $190,000. 

The payments are due on March 22. The regulator has launched a notice of intention to appeal the decision, and should it proceed will make an application to stay the payments, pending a decision on the appeal by the Court of Appeal.