further amended statement of claim · filed on behalf of (name & role of party) blairgowrie...

Filed on behalf of (name & role of party) Blairgowrie Trading Ltd & Ors – Applicants

Prepared by (name of person/lawyer) Steven Foale

Law firm (if applicable) Maurice Blackburn

Tel (03) 9605 2765 Fax (03) 9258 9610

Email [email protected]

Address for service (include state and postcode)

Level 10, 456 Lonsdale Street Melbourne Vic 3000

. [Form approved 01/08/2011]

Form 17 Rule 8.05(1)(a)

Further Amended Statement of claim

(Filed pursuant to leave granted by the Honourable Justice Wigney on 11 November 2014)

NSD 1609 of 2013 Federal Court of Australia

District Registry: New South Wales

Division: General

BLAIRGOWRIE TRADING LTD and others

Applicants

ALLCO FINANCE GROUP LTD (RECEIVERS & MANAGERS APPOINTED) (IN LIQUIDATION) (ACN 077 721 129) and others

Respondents

TABLE OF CONTENTS

A. The Applicants and the Group …………………………………………………….. [1]-[4]

B. The Respondents …………………………………………………………………… [5]-[11]

C. AFG’s Accounting Obligations and Methods …………………………………….. [12]-[14A]

CA. The Senior Debt Facilitiesy ………………………………………………………… [14B]-[14ED]

D. Events from June to 21 August 2007

D.1 The Global Credit Market Tightening ……………………………………….. [15]-[17]

D.2 AFG’s August Reassurances ………………………………………………… [18]-[21]

E. Contraventions on and from 21 August 2007

E.1 The 21 August Representations ……………………………………………... [22]-[24]

E.2 The True Financial Position of AFG …………………………………………. [25]-[26]

E.3 Debt Funding Situation as at 21 August 2007 ……………………………… [27]

E.4 Failure to Disclose the Current Debt Information to ASX …………………. [28]-[34]

E.4A Failure to Disclose the Market Capitalisation Review Terms to ASX …… [34A]-[34G]

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E.5 Misleading Nature of the 21 August Representations …………………….. [35]-[38]

F. Contraventions on and from 21 September 2007

F.1 The 21 September Representations ………………………………………… [39]-[42]

F.2 Misleading Nature of the 21 September Representations ………………… [43]-[46]

G. Contraventions on and from 1 November 2007

G.1 Debt Funding Situation as at 1 November 2007 …………………………… [47]-[51]

G.2 Failure to Disclose the Market Capitalisation Review Terms to ASX ……. [52]-[58]

H. Contraventions on and from 18 December 2007

H.1 Events of 18-19 December 2007 ……………………………………………. [59]-[61]

H.2 Debt Funding Situation as at 18 December 2007 …………………………. [62]-[63]

H.3 Failure to Disclose the December Review Event Information to ASX …… [64]-[70]

I. Contraventions on and from 9 January 2008

I.1 Events of 9 January 2008 ……………………………………………………… [71]-[72]

I.2 Debt Funding Situation as at 9 January 2008 ……………………………….. [73]-[74]

I.3 Failure to Disclose the January Review Event Information to ASX .………. [75]-[81]

J. Contraventions on and from 7 February 2008

J.1 Events of 7 February 2008 ……………………………………………………. [82]-[83]

J.2 Debt Funding Situation as at 7 February 2008 ……………………………... [84]-[85]

J.3 Failure to Disclose the February Extension Information to ASX ………….. [86]-[92]

K. Further Contraventions

K.1 Debt Financing Reassurance Representation and Disclosure Representation ………………………………………………………………….

[93]-[97]

K.2 Misleading Nature of the Debt Financing Reassurance Representation and the Disclosure Representation …………………………………………..

[98]-[102]

L. Involvement by Coe in AFG’s Continuous Disclosure Contraventions

L.1 Coe’s Involvement in the First Disclosure Contravention …………………. [103]-[109]

L.1A Coe’s Involvement in the Second Disclosure Contravention …………….. [109A]-[109G]

L.2 Coe’s Involvement in the Second Alternative Continuous Disclosure Contravention ………………………………………………………………………..

[110]-[114]

L.3 Coe’s Involvement in the Third Continuous Disclosure Contravention ….. [115]-[119]

L.4 Coe’s Involvement in the Fourth Continuous Disclosure Contravention … [120]-[124]

L.5 Coe’s Involvement in the Fifth Continuous Disclosure Contravention …… [125]-[129]

M. Misleading or Deceptive Conduct by Coe and/or Involvement by Coe in AFG’s Misleading or Deceptive Conduct Contraventions

M.1 First Current Debt Representation and Second Current Debt Representation ………………………………………………………………..

[130]-[137]

M.2 First Financial Report Compliance Representation and Second Financial Report Compliance Representation …………………………….

[138]-[146]

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M.3 Debt Financing Reassurance Representation …………………………….. [147]-[156]

M.4 Disclosure Representation ………………………………………………….. [157]-[166]

N. KPMG Claim

N.1 KPMG Retainer ………………………………………………………………. [167]-[169]

N.2 KPMG Conduct ………………………………………………………………. [170]-[171]

N.3 KPMG Contravening Conduct ……………………………………………… [172]-[178]

O. Loss and Damage …………………………………………………………………... [179]-[183]

P. Common Questions of Law or Fact ……………………………………………….. [184]

Q. Glossary ……………………………………………………………………………… [185]

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A. THE APPLICANTS AND THE GROUP

1. The first applicant is and was at all material times a company registered pursuant to the

laws of New Zealand and is capable of suing.

2. The second applicants are and were at all material times trustees of the Te Coco Trust,

and sue in that capacity.

Particulars

The Te Coco Trust was established by a Deed of Trust dated 8 August 2001.

3. The applicants have commenced this proceeding as a representative proceeding pursuant

to Part IVA of the Federal Court of Australia Act 1976 (Cth) on their own behalf and on

behalf of other persons who:

a. at some time during the period commencing on 21 August 2007 and concluding on

27 February 2008 (Relevant Period) acquired an interest in ordinary shares

(Shares) in the first respondent (AFG); and

b. suffered loss or damage by, or which resulted from, the conduct of AFG, David

Raymond Coe (Coe) and/or the third respondent (KPMG) pleaded below,

(Group Members).

4. As at the date of the commencement of this proceeding the Group Members comprised

seven or more persons.

B. THE RESPONDENTS

5. At all material times AFG:

a. was and is a company registered pursuant to the Corporations Act 2001 (Cth) (CA)

and is capable of being sued; and

b. was:

i. a listed disclosing entity within the meaning of s 111AL(1) of the CA;

ii. subject to and bound by the provisions of the Listing Rules (ASX Listing

Rules) of Australian Securities Exchange Limited (ASX);

iii. a person for the purposes of s 1041H of the CA, s 12DA of the Australian

Securities and Investments Commission Act 2001 (Cth) (ASIC Act) and s 42 of

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the Fair Trading Act 1987 (NSW) (as in force prior to 1 January 2011) (FTA);

and

iv. the consolidated reporting entity for AFG and its controlled entities (Allco

Group).

6. At all material times Coe was:

a. a director of AFG;

b. the executive chairman of AFG; and

c. the chairman of the Risk Committee of AFG.

7. Pursuant to an order made on 30 July 2013, and which took effect on and from 5 August

2013, the second respondent was appointed by the Supreme Court of New South Wales

as administrator ad litem to represent the estate of Coe for the purpose of this proceeding.

8. KPMG:

a. was and is at all material times a partnership and the applicants are entitled, by

reason of Rule 9.41 of the Federal Court Rules 2011 (Cth), to bring this proceeding

against the partners of KPMG in the partnership name;

b. conducted business within New South Wales as accountants and auditors under the

partnership name “KPMG”; and

c. included among its partners and employees practising in New South Wales persons

who were registered company auditors including Mr Chris Whittingham who at all

material times was:

i. a partner of KPMG; and

ii. a person for the purposes of ss 1041E and 1041H of the CA, s 12DA of the

ASIC Act and s 42 of the FTA.

9. At all material times during the Relevant Period the Allco Group operated a financial

services business specialising in:

a. structured asset finance;

b. funds management; and

c. debt and equity funding.

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Particulars

This was stated at the foot of ASX Announcements issued by AFG during the Relevant Period,

including the Announcements of 2, 16 and 21 August 2007, 23 October 2007, 5 and 6 November

2007, 7, 12 and 20 December 2007 and 14 February 2008.

10. At all material times during the Relevant Period, the performance of, and future outlook

for, the Allco Group’s business depended on, inter alia, ready access to debt funding in

order to facilitate the origination of financial transactions.

11. At all material times during the Relevant Period, AFG Shares were (excluding periods of

trading halts and the period commencing on 13 February 2008 and concluding on

25 February 2008) quoted and traded on ASX.

C. AFG’S ACCOUNTING OBLIGATIONS AND METHODS


a. was required by:

i. ss 286, 292 and 296 of the CA to prepare financial reports for a financial year

in compliance with the accounting standards (as defined in s 9 of the CA),

including:

(A) Australian Accounting Standard AASB 101 (AASB 101); and

(B) Australian Accounting Standard AASB 132 (AASB 132) (to the extent

that AFG did not expressly elect to adopt Australian Accounting

Standard AASB 7 for reporting periods commencing prior to 1 January

2007);

ii. ss 286, 302 and 304 of the CA to prepare financial reports for a half-year in

compliance with the accounting standards (as defined in s 9 of the CA),

including:

(A) AASB 101; and

(B) AASB 132 (to the extent that AFG did not expressly elect to adopt

Australian Accounting Standard AASB 7 for reporting periods

commencing prior to 1 January 2007); and

iii. s 297 of the CA to prepare financial statements and notes for a financial year

which give a true and fair view of the financial position and performance of

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AFG, and if consolidated financial statements are required, give a true and fair

view of the financial position and performance of the Allco Group,

(AFG’s Accounting Obligations); and

b. accounted on a consolidated basis for assets and liabilities and for the assets and

liabilities of controlled entities in the Allco Group (within the meaning of Australian

Accounting Standard AASB 127).


a. had internal reporting systems that ensured adequate and timely reporting of

material or significant developments regarding finance, debt and/or gearing;

Particulars

The internal reporting systems were those referred to in the Annual Reports of AFG for the year

ended 30 June 2007 that were made and lodged with ASX on 21 August 2007 (Initial 2007 Annual

Report) and on 21 September 2007 (Final 2007 Annual Report) respectively (together, 2007

Annual Reports) (at pages 30-39), and in the Financial Report of AFG for the year ended

30 June 2008 (2008 Financial Report) (at pages 10-17), and in particular included:

i. the establishment of relevant board sub-committees as follows: (A) Audit and Compliance

Committee; (B) Risk Committee; (C) Executive Committee; (D) Investment Committee;

ii. the reporting systems referred to in the written charter of each of the above sub-committees;

iii. the Funds Management Policy referred to in the 2007 Annual Reports (at page 31);

iv. the Transactional Risk Management Policy referred to in the 2007 Annual Reports (at page 31)

and in the 2008 Financial Report (at page 115);

v. the corporate governance practices set out in the 2007 Annual Reports (at page 32 and

following) and in the 2008 Financial Report (at page 10 and following), and in particular

Principle 4 (‘Safeguard Integrity in Financial Reporting’), Principle 5 (‘Make Timely and

Balanced Disclosure’) and Principle 6 (‘Respect the Rights of Shareholders’), incorporating the

mechanisms to ensure compliance with continuous disclosure obligations referred to in the

2007 Annual Reports (at page 36) and in the 2008 Financial Report (at page 15);

vi. the Risk Management Policy and Risk Management Framework referred to in the 2007 Annual

Reports (at page 37) and in the 2008 Financial Report (at pages 16 and 36), including the

‘Disclosure (Market) Policy’, the ‘Continuous Disclosure Policy’ and the ‘External

Communications Policy’; and

vii. the risk management and internal compliance and control systems referred to in the 2007

Annual Reports (at page 38) and in the 2008 Financial Report (at pages 17 and 36), in respect

of which the Chief Executive Officer and (in respect of the year ended 30 June 2007) the Chief

Financial Officer provided the board of AFG written confirmation that to the extent they related

to financial reporting they were operating effectively in all material respects.

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b. ought reasonably to have had internal reporting systems that ensured adequate and

timely reporting of material or significant developments regarding finance, debt

and/or gearing.

Particulars

This obligation existed because of the need for AFG to comply with ss 286 and/or 674 of the CA.

14. At all material times AASB 101 and s 296 of the CA provided that an entity was required

to classify a liability as current in its financial reports when:

a. it expected to settle the liability in its normal operating cycle;

b. it held the liability primarily for the purpose of trading;

c. the liability was due to be settled within twelve months after the end of the reporting

period; or

d. the entity did not have an unconditional right to defer settlement of the liability for at

least twelve months after the end of the reporting period.

Particulars

Paragraph 60 of AASB 101.

14A. At all material times AASB 132 and s 296 of the CA provided that:

a. for each class of financial asset, financial liability and equity instrument, an entity

shall disclose, inter alia, information about the extent and nature of the financial

instruments, including significant terms and conditions that may affect the amount,

timing and certainty of future cash flows; and

b. when financial instruments held or issued by an entity, either individually or as a

class, create a potentially significant exposure to, inter alia, liquidity (or funding) risk

(being the risk that an entity will encounter difficulty in raising funds to meet

commitments associated with financial instruments), terms and conditions that

warrant disclosure include any condition of the instrument or an associated

covenant that, if contravened, would significantly alter any of the other terms of the

instrument.

Particulars

Paragraphs 52, 60 and 63 of AASB 132.

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CA. THE SENIOR DEBT FACILITIESY

14B. At all material times AFG’s banking facilities included the following (together, the Senior

Debt Facilities):

a. a facility under which financial accommodation of up to a maximum of $850 million

(or its equivalent) may be made available to AFG with a repayment date of

22 September 2009 (subject to extension by approval of each lender); and

Particulars

Subscription Agreement dated 22 September 2006 (Subscription Agreement).

b. a facility under which loans of up to a maximum of $50 million may be made

available to AFG with a repayment date of 3 November 2009 (or such other date as

may be agreed between AFG and the lender); and.

Particulars

Cash Advance Facility Agreement dated 3 November 2006 (Cash Advance Facility Agreement).

c. a facility under which loans of up to a maximum of $250 million (or its equivalent)

may be made available to AFG and/or Allco OBU Pty Ltd (ACN 122 372 598) with a

repayment date of 1 May 2008 (subject to extension by approval of each lender).

Particulars

Syndicated Loan Agreement dated 3 May 2007 (Syndicated Loan Agreement).

14C. There were terms of the Subscription Agreement that:

a. a Review Event would occur if, inter alia, the market capitalisation of AFG fell below

$2 billion (subject to certain exceptions not presently relevant) (Review Event);

b. if a Review Event occurred, AFG would notify Commonwealth Bank of Australia

(CBA) (being the Agent under the Subscription Agreement) within 2 business days

after it became aware of the Review Event;

c. while the Review Event subsisted, the Majority Participants (meaning participants

under the Subscription Agreement whose aggregate exposure was at least two

thirds of the exposure of all participants) (Majority Participants) may, through CBA,

notify AFG, within 20 business days of the notice from AFG referred to in sub-

paragraph b. above or from when CBA became actually aware of the Review Event

(whichever is the later):

i. if the Review Event was unacceptable; or

10

ii. if the Review Event was acceptable subject to revised finance terms, those

revised terms;

d. if the Majority Participants notified AFG that the Review Event was unacceptable:

i. AFG must repay, inter alia, all of the moneys advanced to it under the

Subscription Agreement in full within three months of receipt of that notice;

and

ii. all of the commitments of the syndicate lenders under the Subscription

Agreement to provide financial accommodation to AFG would be cancelled;

e. if the Majority Participants notified AFG that the Review Event was acceptable

subject to specified revised finance terms:

i. AFG must, in consultation with CBA, take all reasonable steps necessary on

its part to promptly implement those revised terms; or

ii. if those revised terms were not acceptable to AFG:

A. AFG must repay, inter alia, all of the moneys advanced to it under the

Subscription Agreement in full within three months of receipt of that

notice; and

B. all of the commitments of the syndicate lenders under the Subscription

Agreement to provide financial accommodation to AFG would be

cancelled; and

f. except to the extent that CBA, acting on the instructions of the Majority Participants,

otherwise agreed in writing, the obligations of each participant under the

Subscription Agreement to make available each portion of accommodation under

the Agreement was subject to there being no Review Event subsisting at that time,

with the consequence that if a Review Event subsisted, AFG could not draw down

further under the Subscription Agreement without the consent of the Majority

Participants.

Particulars

Subscription Agreement, cll 20.2, 24.1 and 24.2.

14D. There were terms of the Cash Advance Facility Agreement that:



11

b. if a Review Event occurred, AFG would notify CBA (being the lender under the Cash

Advance Facility Agreement) within 2 business days after it became aware of the

Review Event;

c. while the Review Event subsisted, CBA may notify AFG, within 20 business days of

the notice from AFG referred to in sub-paragraph b. above or from when CBA

became actually aware of the Review Event (whichever is the later):



revised terms;

d. if CBA notified AFG that the Review Event was unacceptable:

i. AFG must repay, inter alia, all of the moneys advanced to it under the Cash

Advance Facility Agreement in full within three months of receipt of that notice;

and

ii. all of the commitments of CBA under the Cash Advance Facility Agreement to

provide loans to AFG would be cancelled;

e. if CBA notified AFG that the Review Event was acceptable subject to specified

revised finance terms:

i. AFG must, in consultation with CBA, take all reasonable steps necessary on



A. AFG must repay, inter alia, all of the moneys advanced to it under the

Cash Advance Facility Agreement in full within three months of receipt of

that notice; and

B. all of the commitments of CBA under the Cash Advance Facility

Agreement to provide loans to AFG would be cancelled; and

f. except to the extent that CBA otherwise agreed in writing, the obligations of CBA

under the Cash Advance Facility Agreement to make available each loan under the

Agreement was subject to there being no Review Event subsisting at that time, with

the consequence that if a Review Event subsisted, AFG could not draw down further

under the Cash Advance Facility Agreement without the consent of CBA.

Particulars

Cash Advance Facility Agreement, cll 16.2, 20.1 and 20.2.

12

14E. There were terms of the Syndicated Loan Agreement that:



b. if a Review Event occurred, AFG would notify Westpac Banking Corporation (WBC)

(being the Agent under the Syndicated Loan Agreement) within 2 business days

after it became aware of the Review Event;

c. while the Review Event subsisted, the Majority Participants (meaning participants

under the Syndicated Loan Agreement who together have at least three quarters of

the commitments thereunder, or if the commitments have been cancelled, the

principal outstanding) (Majority Participants) may, through WBC, notify AFG,

within 20 business days of the notice from AFG referred to in sub-paragraph b.

above or from when WBC became actually aware of the Review Event (whichever is

the later):



revised terms;

d. if the Majority Participants notified AFG that the Review Event was unacceptable:

i. AFG and Allco OBU Pty Ltd must repay, inter alia, all of the moneys advanced

to them under the Syndicated Loan Agreement in full within three months of

receipt of that notice; and

ii. all of the commitments of the syndicate lenders under the Syndicated Loan

Agreement to provide loans to AFG and/or Allco OBU Pty Ltd would be

cancelled;

e. if the Majority Participants notified AFG that the Review Event was acceptable

subject to specified revised finance terms:

i. AFG must, in consultation with WBC, take all reasonable steps necessary on



A. AFG and Allco OBU Pty Ltd must repay, inter alia, all of the moneys

advanced to them under the Syndicated Loan Agreement in full within

three months of receipt of that notice; and

13

B. all of the commitments of the syndicate lenders under the Syndicated

Loan Agreement to provide loans to AFG and/or Allco OBU Pty Ltd

would be cancelled; and

f. except to the extent that WBC, acting on the instructions of the Majority Participants,

otherwise agreed in writing, the obligations of each participant under the Syndicated

Loan Agreement to make available each loan under the Agreement was subject to

there being no Review Event subsisting at that time, with the consequence that if a

Review Event subsisted, AFG and Allco OBU Pty Ltd could not draw down further

under the Syndicated Loan Agreement without the consent of the Majority

Participants.

Particulars

Syndicated Loan Agreement, cll 16.2, 20.1 and 20.2.

D. EVENTS FROM JUNE TO 21 AUGUST 2007

D.1 The Global Credit Market Tightening

15. At all material times from about mid-June 2007, there was a reversal of favourable credit

conditions that had existed in global credit markets for some years, resulting in:

a. from about mid-June 2007:

i. widening spreads on a broad range of credit securities;

ii. a significant reduction in the availability of asset-backed commercial paper;

iii. increased premia on credit default swaps; and

iv. a liquidity squeeze in unsecured interbank money markets;

b. on 9 and 10 August 2007, substantial injections of cash balances into the banking

system by central banks including the United States Federal Reserve, the European

Central Bank and the Australian Reserve Bank; and

c. from about mid-August 2007:

i. a significant reduction in the global availability of credit; and

ii. a significant increase in the cost of most forms of available business credit,

(Global Credit Market Tightening).

14

Particulars

Particulars of the reversal of favourable credit conditions and the matters in sub-paragraphs a., b. and

c. may be found in:

i. Financial Stability Review, September 2007, Reserve Bank of Australia, pages 1-10 and 13-

17;

ii. Global Financial Stability Report, October 2007, International Monetary Fund, Executive

Summary and Chapter 1; and

iii. Financial Stability Review, December 2007, European Central Bank.

Further particulars may be provided after the filing of the applicants’ expert evidence.

16. At all material times on and after 1 August 2007, persons who commonly invest in

securities:

a. were more risk averse regarding issues relating to debt funding and facilities; and

b. were concerned regarding the exposure of companies to adverse impacts from the

Global Credit Market Tightening.

17. At all material times on and after 1 August 2007, there were investors in AFG (including

those who commonly invest in securities) who were concerned regarding the exposure of

AFG to adverse impacts from the Global Credit Market Tightening.

Particulars

The AFG investors included those whose queries are referred to in AFG’s Announcements to ASX

dated 2 August 2007 and 16 August 2007 pleaded below.

D.2 AFG’s August Reassurances

18. On 2 August 2007 AFG stated that:

In response to a number of investor queries regarding the deterioration in the US

sub-prime loan market, [AFG] confirms it has no direct exposure to US sub-prime

assets, and therefore remains largely unaffected by current issues in this sector.

…

[AFG] restates that the impact of the US sub-prime market crisis is negligible, and

reiterates its earnings guidance for the year ended 30 June 2007…

(2 August Reassurance).

Particulars

AFG Announcement to ASX dated 2 August 2007.

15


In response to investor queries as to [AFG’s] current and future funding needs, [AFG]

confirms there is no significant impact across its business from the current market

liquidity issues.

As previously announced to the market (ASX announcement August 2, 2007), [AFG]

has no direct exposure to U.S. sub-prime assets …

[AFG’s] broad funding policy is not to borrow short term and lend long term…

Independent of any subsidiary or fund, [AFG] has total committed debt financing

available of A$1.5billion. Current capacity to meet investment opportunities and

liquidity requirements is A$906 million. In addition, [AFG’s] limited recourse finance

facilities are term funded, generally matching the maturity of long term lease

receivables.

[AFG] has a global group of relationship banks that continue to be strongly

supportive of the asset classes in which [AFG] originates and invests. Consequently,

while [AFG] recognises that current market volatility may impact credit margins in the

short term, [AFG] is confident of its ability to continue to originate assets and finance

or arrange finance for them.

(16 August Reassurance).

Particulars

AFG Announcement to ASX dated 16 August 2007.


While we recognise that current market volatility may impact credit margins in the

short term, we are confident of our ability to continue to originate assets and finance

or arrange finance for them.

We have no direct exposure to U.S. sub-prime assets. [AFG’s] broad funding policy

is not to borrow short term and lend long term.

We have plenty of liquidity on our balance sheet, and independent of any subsidiary

or fund, [AFG] has total committed debt financing of $1.5billion. [AFG] also has a

global group of relationship banks that continue to be strongly supportive of the asset

classes in which [AFG] originates and invests.

16

We are confident about the future as we have a robust and resilient business and

believe [AFG] is on track to become a significant player in global markets.

(21 August Announcement Reassurance).

Particulars

AFG Announcement to ASX dated 21 August 2007, titled ‘Allco Finance Group (ASX: AFG)

announces financial performance ahead of expectations’.

21. On 21 August 2007 AFG also stated that:

The markets

� No short term impact other than sentiment:

� Liquidity on balance sheet

� Limited recourse finance facilities term funded

� Active program of hedging currency exposure

� No direct impact from U.S. sub-prime markets

� Strong support from relationship banks for on-going debt funding

(21 August Investor Presentation Reassurance).

Particulars

AFG Investor Presentation provided to ASX dated 21 August 2007, titled ‘Allco Finance Group

Annual Results 2007’.

E. CONTRAVENTIONS ON AND FROM 21 AUGUST 2007

E.1 The 21 August Representations

22. On 21 August 2007, AFG made and lodged with ASX the Initial 2007 Annual Report,

which accompanied and formed part of AFG’s Appendix 4E Preliminary Final Report.

23. On 21 August 2007, AFG represented that as at 30 June 2007 the Allco Group had total

current interest-bearing loans and borrowings of $193,463,000 (First Current Debt

Representation).

Particulars

The First Current Debt Representation was in writing and made in the Initial 2007 Annual Report (at

page 102).

17

24. On 21 August 2007 AFG represented that the consolidated financial statements in the

Initial 2007 Annual Report (2007 Financial Report) were prepared in compliance with:

a. Australian Accounting Standards; and

b. AFG’s obligations under the CA,

(First Financial Report Compliance Representation).

Particulars

i. The First Financial Report Compliance Representation was partly express and partly implied.

ii. Insofar as it was express, it was made in writing in the Initial 2007 Annual Report (at pages 75

and 142).

iii. Insofar as it was implied, it was implied by reason of AFG’s Accounting Obligations, the publication

by AFG during the Relevant Period of its financial statements, and the obligations imposed on AFG by

ss 296 and 297 of the CA.

E.2 The True Financial Position of AFG

25. As at 30 June 2007, the Allco Group had total current interest-bearing loans and

borrowings of at least $2,071,169,000 (Current Debt Information).

Particulars

i. The applicants refer to AFG’s Announcement to ASX dated 27 February 2008 titled ‘Allco

Finance Group (ASX: AFG) – Limited recourse maturity split’ (27 February Announcement),

and to the ‘Reissued Half-Year Financial Report’ of AFG for the half year ended

31 December 2007 attached thereto (Reissued Half-Year Report), and in particular Note 8(a)

(at page 23).

ii. Further particulars may be provided after discovery.

25A. As at 30 June 2007:

a. AFG had drawn down the total sum of $212,810,000 under the Senior Debt

FacilitiesSubscription Agreement and the Cash Advance Facility Agreement;

b. the liability of AFG to repay the sum of $212,810,000 referred to in sub-

paragraph a., when considered in light of the terms of the Subscription Agreement

and the Cash Advance Facility AgreementSenior Debt Facilities pleaded in

paragraphs 14C, and 14D and 14E (together, the Market Capitalisation Review

Terms), created a potentially significant liquidity (or funding) risk for AFG within the

meaning of AASB 132; and

18

c. the Market Capitalisation Review Terms were, within the meaning of AASB 132:

i. significant terms and conditions that may affect the amount, timing and

certainty of future cash flows of AFG; and

ii. terms that, if contravened, would significantly alter other terms of the

Subscription Agreement and the Cash Advance Facility AgreementSenior

Debt Facilities, namely:

(A) the terms specifying the date for repayment of the liability referred to in

sub-paragraph a.; and

(B) the terms providing for the ongoing availability of the facilities under the

Senior Debt Facilitiesthose Agreements.

25B. By reason of the matters pleaded in paragraph 25A, AFG was required to disclose, the

Market Capitalisation Review Terms in the 2007 Financial Report contained in the Initial

2007 Annual Report:

a. the Market Capitalisation Review Terms; and

b. the quantum of AFG borrowings that were subject to the Market Capitalisation

Review Terms (Review Event Affected Borrowings) as at 30 June 2007.

25C. AFG did not disclose the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings in the 2007 Financial Report contained in the Initial 2007 Annual

Report.

26. By reason of the matters pleaded in paragraph 25 and/or paragraphs 25A to 25C, the

2007 Financial Report contained in the Initial 2007 Annual Report was not prepared in

compliance with:


b. AFG’s obligations under the CA.

Particulars

The 2007 Financial Report contained in the Initial 2007 Annual Report was not prepared in

compliance with AASB 101, AASB 132 and ss 296 and 297 of the CA in that:

i. contrary to AASB 101, the true amount of the Allco Group’s total current interest-bearing loans

and borrowings as at 30 June 2007, as pleaded at paragraph 25, was not disclosed; and

ii. contrary to AASB 132, the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings were not disclosed.

19

E.3 Debt Funding Situation as at 21 August 2007

27. By reason of the Global Credit Market Tightening, by at least 21 August 2007:

a. it was substantially more difficult than it had been prior to June 2007 for the Allco

Group to obtain access to debt funding or facilities;

b. it was substantially more expensive than it had been prior to June 2007 for the Allco


c. there was a likelihood, alternatively a material risk, that it would be significantly more

difficult for the Allco Group to obtain access to debt funding or facilities during the

remainder of the year ending 30 June 2008; and

d. there was a likelihood, alternatively a material risk, that it would be significantly more

expensive for the Allco Group to obtain access to debt funding or facilities during the

remainder of the year ending 30 June 2008.

E.4 Failure to Disclose the Current Debt Information to ASX

28. By reason of the matters pleaded in paragraphs 9, 10, 15 to 21 and 27, at all material

times on and after 21 August 2007, the Current Debt Information was:

a. information concerning AFG that a reasonable person would expect to have a

material effect on the price or value of AFG Shares within the meaning of ASX

Listing Rule 3.1; and/or

b. significant information needed by an investor to make an informed assessment of

AFG’s financial performance and financial position within the meaning of paragraph

12 of Appendix 4E to the ASX Listing Rules.

29. On 21 August 2007, and at all material times thereafter, AFG was aware of the Current

Debt Information within the meaning of ASX Listing Rules 3.1 and/or 4.3A (as ‘awareness’

is defined in ASX Listing Rule 19.12).

Particulars

i. As at 21 August 2007 one or more of the directors and/or executive officers of AFG had, or

ought reasonably to have, come into possession of the Current Debt Information in the course

of the performance of their duties by reason of the matters pleaded at sub-paragraphs 13.a and

13.b.

ii. Further, AFG ought to have known the Current Debt Information because in the event that AFG

had prepared the 2007 Financial Report contained in the Initial 2007 Annual Report in

20

accordance with AFG’s Accounting Obligations, it would necessarily have been apprised of the

Current Debt Information.

iii. Further particulars may be provided after discovery.

30. On 21 August 2007 AFG was required:

a. pursuant to ASX Listing Rule 3.1, immediately to tell ASX the Current Debt

Information; and/or

b. pursuant to ASX Listing Rule 4.3A (and 4.3B), to give ASX the Current Debt

Information immediately, or alternatively no later than by 31 August 2007.

31. On 21 August 2007, and at all material times thereafter, the Current Debt Information was

information that:

a. AFG had;

b. was not generally available; and

c. a reasonable person would expect, if it were generally available, to have a material

effect on the price or value of AFG Shares,

within the meaning of Chapter 6CA of the CA.

32. AFG did not tell ASX the Current Debt Information until 27 February 2008, or alternatively

25 February 2008.

Particulars

i. The Current Debt Information was told to ASX, for the first time, in AFG’s Half-Year Financial

Report for the half year ended 31 December 2007, which was lodged with ASX on

25 February 2008 (Initial Half-Year Report).

ii. The applicants also refer to the 27 February Announcement and to the Reissued Half-Year

Report, and in particular Note 8(a) (at page 23).

33. By reason of the matters pleaded in paragraphs 28 to 32, from 21 August 2007, AFG

contravened s 674(2) of the CA by not immediately telling ASX the Current Debt

Information (First Disclosure Contravention).

34. The First Disclosure Contravention was a continuing contravention that continued until

27 February 2008, or alternatively 25 February 2008.

21

E.4A Failure to Disclose the Market Capitalisation Review Terms to ASX

34A. By reason of the matters pleaded in paragraphs 9, 10, 15 to 21, 25A.a and .b and 27, at

all material times on and after 21 August 2007, the Market Capitalisation Review Terms

and/or the quantum of AFG borrowings that were from time to time subject to the Market

Capitalisation Review Terms (Review Event Affected Borrowings) were:

a. information concerning AFG that a reasonable person would expect to have a

material effect on the price or value of AFG Shares within the meaning of ASX

Listing Rule 3.1; and/or

b. significant information needed by an investor to make an informed assessment of

AFG’s financial performance and financial position within the meaning of paragraph

12 of Appendix 4E to the ASX Listing Rules.

34B. On 21 August 2007, and at all material times thereafter, AFG was aware of the Market

Capitalisation Review Terms and the Review Event Affected Borrowings within the

meaning of ASX Listing Rules 3.1 and/or 4.3A (as ‘awareness’ is defined in ASX Listing

Rule 19.12).

Particulars

i. As at 21 August 2007 one or more of the directors and/or executive officers of AFG had, or

ought reasonably to have, come into possession of the Market Capitalisation Review Terms in

the course of the performance of their duties by reason of the matters pleaded at sub-

paragraphs 13.a and 13.b.

ii. Further, AFG ought to have known the Market Capitalisation Review Terms because in the

event that AFG had prepared the 2007 Financial Report contained in the Initial 2007 Annual

Report in accordance with AFG’s Accounting Obligations, it would necessarily have been

apprised of the Market Capitalisation Review Terms.

iii. Further, as at and after 21 August 2007, one or more of the directors and/or executive officers of

AFG knew or ought reasonably to have known of the quantum of AFG’s borrowings pursuant to

the Senior Debt FacilitiesSubscription Agreement and the Cash Advance Facility Agreement by

reason of the matters pleaded at sub-paragraphs 13.a and 13.b.

iv. Further particulars may be provided after discovery.

34C. On 21 August 2007 AFG was required:

a. pursuant to ASX Listing Rule 3.1, immediately to tell ASX the Market Capitalisation

Review Terms and/or the Review Event Affected Borrowings; and/or

22

b. pursuant to ASX Listing Rule 4.3A (and 4.3B), to give ASX the Market Capitalisation

Review Terms and/or the Review Event Affected Borrowings immediately, or

alternatively no later than by 31 August 2007.

34D. On 21 August 2007, and at all material times thereafter, the Market Capitalisation Review

Terms and/or the Review Event Affected Borrowings was information that:

a. AFG had;





34E. AFG did not tell ASX the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings until 27 February 2008, or alternatively 25 February 2008.

Particulars

The Market Capitalisation Review Terms and the Review Event Affected Borrowings were told to

ASX, for the first time, in:

i. AFG’s Announcement to ASX dated 25 February 2008 titled ‘Allco Finance Group (ASX:AFG) –

Business Update and Financial Results for the Half Year ended 31 December 2007’

(25 February Announcement);

ii. the Initial Half-Year Report (at pages 5, 7-8, 15, 24 and 39-40);

iii. AFG’s Investor Presentation dated 25 February 2008 titled ‘Business Update and Half Year

Results Announcement – Half Year Ended 31 December 2007’ (25 February Investor

Presentation) (at pages 4-5); and

iv. the letter from AFG to ASX dated 27 February 2008 titled ‘Allco Finance Group Limited

(ASX:AFG) – response to ASX query’ (27 February ASX Letter).

34F. By reason of the matters pleaded in paragraphs 34A to 34E, from 21 August 2007, AFG

contravened s 674(2) of the CA by not immediately telling ASX the Market Capitalisation

Review Terms and/or the Review Event Affected Borrowings (Second Disclosure

Contravention).

34G. The Second Disclosure Contravention was a continuing contravention that continued until


23

E.5 Misleading Nature of the 21 August Representations

35. By making:

a. the First Current Debt Representation; and

b. the First Financial Report Compliance Representation,

and each of them, AFG engaged in conduct:

c. in relation to a financial product or a financial service within the meaning of s 1041H

of the CA; and/or

d. in trade or commerce in relation to financial services within the meaning of s 12DA

of the ASIC Act; and/or

e. in trade or commerce within the meaning of s 42 of the FTA.

36. By reason of the matters pleaded in paragraph 25, at the time it was made, and at all

material times during the Relevant Period, the First Current Debt Representation was

misleading or deceptive or likely to mislead or deceive.


material times during the Relevant Period, the First Financial Report Compliance

Representation was misleading or deceptive or likely to mislead or deceive.

38. In the premises, by making:

a. the First Current Debt Representation; and

b. the First Financial Report Compliance Representation,

and each of them, AFG contravened:

c. s 1041H of the CA; and/or

d. s 12DA of the ASIC Act; and/or

e. s 42 of the FTA,

(individually, the First Current Debt Contravention and the First Financial Report

Compliance Contravention).

24

F. CONTRAVENTIONS ON AND FROM 21 SEPTEMBER 2007

F.1 The 21 September Representations

39. On 21 September 2007, AFG made and lodged with ASX the Final 2007 Annual Report.

40. On 21 September 2007, AFG represented that as at 30 June 2007 the Allco Group had

total current interest-bearing loans and borrowings of $193,463,000 (Second Current

Debt Representation).

Particulars

The Second Current Debt Representation was in writing and made in the Final 2007 Annual Report

(at page 102).

41. On 21 September 2007 AFG represented that the consolidated financial statements in the

Final 2007 Annual Report (2007 Financial Report) were prepared in compliance with:


b. AFG’s obligations under the CA,

(Second Financial Report Compliance Representation).

Particulars

i. The Second Financial Report Compliance Representation was partly express and partly implied.

ii. Insofar as it was express, it was made in writing in the Final 2007 Annual Report (at pages 75

and 142).

iii. Insofar as it was implied, it was implied by reason of AFG’s Accounting Obligations, the publication

by AFG during the Relevant Period of its financial statements, and the obligations imposed on AFG by

ss 296 and 297 of the CA.

41A. By reason of the matters pleaded in paragraph 25A, AFG was required to disclose, the

Market Capitalisation Review Terms in the 2007 Financial Report contained in the Final

2007 Annual Report:

a. the Market Capitalisation Review Terms; and

b. the Review Event Affected Borrowings as at 30 June 2007.

41B. AFG did not disclose the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings in the 2007 Financial Report contained in the Final 2007 Annual

Report.

25

42. By reason of the matters pleaded in paragraph 25 and/or paragraphs 25A, 41A and 41B,

the 2007 Financial Report contained in the Final 2007 Annual Report was not prepared in

compliance with:


b. AFG’s obligations under the CA.

Particulars

The 2007 Financial Report contained in the Final 2007 Annual Report was not prepared in

compliance with AASB 101, AASB 132 and ss 296 and 297 of the CA in that:

i. contrary to AASB 101, the true amount of the Allco Group’s total current interest-bearing loans

and borrowings as at 30 June 2007, as pleaded at paragraph 25, was not disclosed; and

ii. contrary to AASB 132, the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings were not disclosed.

F.2 Misleading Nature of the 21 September Representations

43. By making:

a. the Second Current Debt Representation; and

b. the Second Financial Report Compliance Representation,



of the CA; and/or





material times during the Relevant Period, the Second Current Debt Representation was

misleading or deceptive or likely to mislead or deceive.


material times during the Relevant Period, the Second Financial Report Compliance

Representation was misleading or deceptive or likely to mislead or deceive.


a. the Second Current Debt Representation; and

26

b. the Second Financial Report Compliance Representation,




e. s 42 of the FTA,

(individually, the Second Current Debt Contravention and the Second Financial

Report Compliance Contravention).

G. CONTRAVENTIONS ON AND FROM 1 NOVEMBER 2007

G.1 Debt Funding Situation as at 1 November 2007

47. The matters pleaded in paragraphs 49 to 58 are further, or in the alternative to those

pleaded in paragraphs 34A to 34G.

48. There is no paragraph 48.

49. Further or alternatively to paragraph 27, by 1 November 2007:











50. As at the close of trading on 31 October 2007:

a. the closing price of AFG Shares:

i. was $7.63; and

ii. had declined by approximately 28% since the close of trading on 2 July 2007,

when the closing price was $10.59;

27

b. AFG’s market capitalisation:

i. was approximately $2.655 billion; and

ii. had declined by approximately 28% since the close of trading on 2 July 2007,

when the market capitalisation was approximately $3.671 billion; and

c. there was a likelihood, alternatively a material risk, that:

i. the decline in the price of AFG Shares and market capitalisation since

2 July 2007 would continue into the foreseeable future; and

ii. therefore, a Review Event would or might occur in the foreseeable future.

51. Further, by 1 November 2007:

a. there was a likelihood, alternatively a material risk, that if a Review Event occurred,

the Majority Participants (under the Subscription Agreement) and/or CBA (under the

Cash Advance Facility Agreement) and/or the Majority Participants (under the

Syndicated Loan Agreement) would notify AFG, within 20 business days of the

Review Event occurring, that the Review Event was unacceptable;

b. there was a likelihood, alternatively a material risk, that if a Review Event occurred,

and the Majority Participants (under the Subscription Agreement) and/or CBA (under

the Cash Advance Facility Agreement) and/or the Majority Participants (under the

Syndicated Loan Agreement) notified AFG, within 20 business days of the Review

Event occurring, that the Review Event was acceptable subject to revised finance

terms, those terms would be:

i. substantially more expensive, or otherwise less favourable, to AFG than those

which had existed prior to the occurrence of the Review Event; and/or

ii. terms that AFG was either unable or unwilling to implement;

c. there was a likelihood, alternatively a material risk, that if a Review Event occurred,




Event occurring, that the Review Event was unacceptable, or was acceptable

subject to revised finance terms that AFG was either unable or unwilling to

implement, then AFG would not be able to:

28

i. repay all of the moneys advanced to it under the Subscription Agreement, and

the Cash Advance Facility Agreement and/or the Syndicated Loan Agreement

in full within three months of receipt of that notice; or

ii. in the alternative, secure alternative financial accommodation, either at all or

on the same or similar terms, to that which was to be provided to it under the

Subscription Agreement, and the Cash Advance Facility Agreement and/or the

Syndicated Loan Agreement; and

d. there was a likelihood, alternatively a material risk, that if a Review Event occurred,



Syndicated Loan Agreement) would not provide their consent to any further draw

downs by AFG under those Agreements.

G.2 Failure to Disclose the Market Capitalisation Review Terms to ASX

52. By reason of the matters pleaded in paragraphs 9, 10, 15 to 21 and 49 to 51, by at least

1 November 2007, and at all material times thereafter, the Market Capitalisation Review

Terms and/or the Review Event Affected Borrowings was information concerning AFG

that a reasonable person would expect to have a material effect on the price or value of

AFG Shares within the meaning of ASX Listing Rule 3.1.

53. On 1 November 2007, and at all material times thereafter, AFG was aware of the Market

Capitalisation Review Terms and the Review Event Affected Borrowings within the

meaning of ASX Listing Rule 3.1 (as ‘awareness’ is defined in ASX Listing Rule 19.12).

Particulars

i. As at 1 November 2007 one or more of the directors and/or executive officers of AFG had, or

ought reasonably to have, come into possession of the Market Capitalisation Review Terms in



ii. Further, AFG’s knowledge of the Market Capitalisation Review Terms is to be inferred from the

statements made in the 27 February ASX Letter.

iii. Further, as at and after 1 November 2007, one or more of the directors and/or executive officers

of AFG knew or ought reasonably to have known of the quantum of AFG’s borrowings pursuant

to the Senior Debt FacilitiesSubscription Agreement and the Cash Advance Facility Agreement

by reason of the matters pleaded at sub-paragraphs 13.a and 13.b.

iv. Further particulars may be provided after discovery.

29

54. On 1 November 2007 AFG was required, pursuant to ASX Listing Rule 3.1, immediately to

tell ASX the Market Capitalisation Review Terms and/or the Review Event Affected

Borrowings.

55. On 1 November 2007, and at all material times thereafter, the Market Capitalisation

Review Terms and/or the Review Event Affected Borrowings was information that:

a. AFG had;





56. AFG did not tell ASX the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings until 27 February 2008, or alternatively 25 February 2008.

Particulars

The Market Capitalisation Review Terms and the Review Event Affected Borrowings were told to

ASX, for the first time, in:

i. the 25 February Announcement;


iii. the 25 February Investor Presentation (at pages 4-5); and

iv. the 27 February ASX Letter.

57. By reason of the matters pleaded in paragraphs 52 to 56, from 1 November 2007 AFG

contravened s 674(2) of the CA by not immediately telling ASX the Market Capitalisation

Review Terms and/or the Review Event Affected Borrowings (Second Alternative

Continuous Disclosure Contravention).

58. The Second Alternative Continuous Disclosure Contravention was a continuing

contravention that continued until 27 February 2008, or alternatively 25 February 2008.

H. CONTRAVENTIONS ON AND FROM 18 DECEMBER 2007

H.1 Events of 18-19 December 2007

59. On 18 December 2007, a Review Event occurred in relation to the Senior Debt

FacilitiesSubscription Agreement and the Cash Advance Facility Agreement, but did not

subsist (December Review Event).

30

60. On or about 18 December 2007, following the occurrence of the December Review Event:

a. AFG was not permitted to make any further draw downs under the Subscription

Agreement and the Cash Advance Facility Agreement without the consent of the

Majority Participants (in the case of the Subscription Agreement) and CBA (in the

case of the Cash Advance Facility Agreement); and

b. AFG commenced negotiating with the syndicate lenders a restructure of the terms of

the Senior Debt FacilitiesSubscription Agreement and the Cash Advance Facility

Agreement,

(December Review Event Consequences).

Particulars

i. The negotiations are referred to in the 25 February Announcement, the Initial Half-Year Report

(at pages 5, 7-8, 15, 24 and 39-40), the 25 February Investor Presentation (at pages 4-5) and

the 27 February ASX Letter.

ii. The applicants also refer to the letters from AFG to CBA and WBC dated 20 December 2007.


61. On 19 December 2007, AFG stated that:

In response to current market conditions, [AFG] reiterates that its current funding

facilities are sourced in the Australian domestic market and that [AFG] is not directly

reliant on financing or refinancing in the US debt markets.

[AFG] also wishes to confirm its current corporate debt facilities and their maturity

dates. These are as previously outlined at the announcement of [AFG’s] FY07

results and comprise:

1. $900 million senior debt facilities, maturing in September 2009;

2. $250 million senior debt facility, scheduled for refinancing in May 2008;

and

3. $350 million term subordinated debt (Allco Notes: AFGHA), maturing

November 2012.

Currently, [AFG] has cash and undrawn capacity under the above senior debt

facilities of $314 million…

31

We actively manage our business in the context of our available funding facilities and

current transactions have committed bank funding in place, together with sufficient

capacity under [AFG’s] above facilities to fund [AFG’s] investments.

(19 December Reassurance).

Particulars

AFG Announcement to ASX dated 19 December 2007 titled ‘Allco Finance Group (ASX: AFG)

confirms current corporate funding facilities’.

H.2 Debt Funding Situation as at 18 December 2007

62. Further or alternatively to paragraph 49, by 18 December 2007:











63. Further or alternatively to paragraph 51, by 18 December 2007:












32























H.3 Failure to Disclose the December Review Event Information to ASX

64. By reason of the matters pleaded in paragraphs 9, 10, 15 to 21, 62 and 63, at all material

times on and after 18 December 2007 the occurrence of the December Review Event,

either alone or, alternatively, in conjunction with the December Review Event

Consequences (together, the December Review Event Information) was information

concerning AFG that a reasonable person would expect to have a material effect on the

price or value of AFG Shares within the meaning of ASX Listing Rule 3.1.

65. On 18 December 2007, and at all material times thereafter, AFG was aware of the

December Review Event Information within the meaning of ASX Listing Rule 3.1 (as

‘awareness’ is defined in ASX Listing Rule 19.12).

33

Particulars

i. As at 18 December 2007 one or more of the directors and/or executive officers of AFG had, or

ought reasonably to have, come into possession of the December Review Event Information in



ii. Further, AFG’s knowledge of the December Review Event Information is to be inferred from the



66. On 18 December 2007, AFG was required, pursuant to ASX Listing Rule 3.1, immediately

to tell ASX:

a. the December Review Event Information; or

b. in the alternative, the occurrence of the December Review Event.

67. On 18 December 2007, and at all material times thereafter, the December Review Event

Information or, in the alternative, the occurrence of the December Review Event was

information that:

a. AFG had;





68. AFG did not tell ASX the December Review Event Information until 27 February 2008, or

alternatively 25 February 2008.

Particulars

The December Review Event Information was told to ASX, for the first time, in:





69. By reason of the matters pleaded in paragraphs 64 to 68, from 18 December 2007 AFG

contravened s 674(2) of the CA by not immediately telling ASX:


34

b. in the alternative, the occurrence of the December Review Event,

(Third Continuous Disclosure Contravention).

70. The Third Continuous Disclosure Contravention was a continuing contravention that

continued until 27 February 2008, or alternatively 25 February 2008.

I. CONTRAVENTIONS ON AND FROM 9 JANUARY 2008

I.1 Events of 9 January 2008

71. On 9 January 2008 a Review Event occurred in relation to the Senior Debt

FacilitiesSubscription Agreement and the Cash Advance Facility Agreement that

subsisted until at least 25 February 2008 (January Review Event).

72. On or about 9 January 2008, following the occurrence of the January Review Event:

a. AFG was not permitted to make any further draw downs under the Senior Debt

FacilitiesSubscription Agreement and the Cash Advance Facility Agreement without

the consent of the Majority Participants (in the case of the Subscription Agreement),

and CBA (in the case of the Cash Advance Facility Agreement) and the Majority

Participants (in the case of the Syndicated Loan Agreement); and

b. AFG commenced, or alternatively continued, negotiating with the syndicate lenders

a restructure of the terms of the Senior Debt FacilitiesSubscription Agreement and

the Cash Advance Facility Agreement,

(January Review Event Consequences).

Particulars

i. The applicants repeat the particulars sub-joined to paragraph 60The negotiations are referred to

in the 25 February Announcement, the Initial Half-Year Report (at pages 5, 7-8, 15, 24 and 39-

40), the 25 February Investor Presentation (at pages 4-5) and the 27 February ASX Letter.

ii. Further particulars may be provided after discovery.

I.2 Debt Funding Situation as at 9 January 2008

73. Further or alternatively to paragraph 62, by 9 January 2008:





35







74. Further or alternatively to paragraph 63, by 9 January 2008:



























36








I.3 Failure to Disclose the January Review Event Information to ASX

75. By reason of the matters pleaded in paragraphs 9, 10, 15 to 21, 61, 73 and 74, at all

material times on and after 9 January 2008, the occurrence of the January Review Event,

either alone or, alternatively, in conjunction with the January Review Event Consequences

(together, the January Review Event Information) was information concerning AFG that

a reasonable person would expect to have a material effect on the price or value of AFG

Shares within the meaning of ASX Listing Rule 3.1.

76. On 9 January 2008, and at all material times thereafter, AFG was aware of the January

Review Event Information within the meaning of ASX Listing Rule 3.1 (as ‘awareness’ is

defined in ASX Listing Rule 19.12).

Particulars

i. As at 9 January 2008 one or more of the directors and/or executive officers of AFG had, or

ought reasonably to have, come into possession of the January Review Event Information in the

course of the performance of their duties by reason of the matters pleaded at sub-paragraphs

13.a and 13.b.

ii. Further, AFG’s knowledge of the January Review Event Information is to be inferred from the



77. On 9 January 2008 AFG was required, pursuant to ASX Listing Rule 3.1, immediately to

tell ASX:

a. the January Review Event Information; or

b. in the alternative, the occurrence of the January Review Event.

78. On 9 January 2008, and at all material times thereafter, the January Review Event

Information or, in the alternative, the occurrence of the January Review Event was

information that:

37

a. AFG had;





79. AFG did not tell ASX the January Review Event Information until 27 February 2008, or


Particulars

The January Review Event Information was told to ASX, for the first time, in:





80. By reason of the matters pleaded in paragraphs 75 to 79, from 9 January 2008 AFG

contravened s 674(2) of the CA by not immediately telling ASX:


b. in the alternative, the occurrence of the January Review Event,

(Fourth Continuous Disclosure Contravention).

81. The Fourth Continuous Disclosure Contravention was a continuing contravention that

continued until 27 February 2008, or alternatively 25 February 2008.

J. CONTRAVENTIONS ON AND FROM 7 FEBRUARY 2008

J.1 Events of 7 February 2008

82. By reason of the Market Capitalisation Review Terms (in particular the matters pleaded in

sub-paragraphs 14C.c, and 14D.c and 14E.c) and the January Review Event, the Majority

Participants (under the Subscription Agreement) and CBA (under the Cash Advance

Facility Agreement) and the Majority Participants (under the Syndicated Loan Agreement)

had until 7 February 2008 (being 20 business days after the occurrence of the January

Review Event) (Notification Period) to notify AFG:

38

a. whether the January Review Event was unacceptable; or

b. whether the January Review Event was acceptable subject to revised finance terms.

83. On or about 7 February 2008, AFG and the syndicate lenders under the Senior Debt

FacilitiesSubscription Agreement and the Cash Advance Facility Agreement agreed to

extend the Notification Period to 31 March 2008 (February Extension Information).

Particulars

Subscription Agreement Amending Deed dated 7 February 2008; Cash Advance Facility Agreement

Amending Deed dated 7 February 2008; Syndicated Loan Agreement Amending Deed dated

7 February 2008. The applicants also refer to the 27 February ASX Letter. Further particulars may be

provided after discovery.

J.2 Debt Funding Situation as at 7 February 2008

84. Further or alternatively to paragraph 73, by 7 February 2008:











85. Further or alternatively to paragraph 74, by 7 February 2008:

a. there was a likelihood, alternatively a material risk, that the Majority Participants

(under the Subscription Agreement) and/or CBA (under the Cash Advance Facility

Agreement) and/or the Majority Participants (under the Syndicated Loan Agreement)

would notify AFG, on or before 31 March 2008, that the January Review Event was

unacceptable;

b. there was a likelihood, alternatively a material risk, that if the Majority Participants



39

notified AFG, on or before 31 March 2008, that the January Review Event was

acceptable subject to revised finance terms, those terms would be:


which had existed prior to the occurrence of the January Review Event; and/or


c. there was a likelihood, alternatively a material risk, that if the Majority Participants



notified AFG, on or before 31 March 2008, that the January Review Event was

unacceptable, or was acceptable subject to revised finance terms that AFG was

either unable or unwilling to implement, then AFG would not be able to:








d. there was a likelihood, alternatively a material risk, that as a result of the January

Review Event the Majority Participants (under the Subscription Agreement) and/or

CBA (under the Cash Advance Facility Agreement) and/or the Majority Participants

(under the Syndicated Loan Agreement) would not provide their consent to any

further draw downs by AFG under those Agreements.

J.3 Failure to Disclose the February Extension Information to ASX

86. By reason of the matters pleaded in paragraphs 9, 10, 15 to 21, 61, 84 and 85, at all

material times on and after 7 February 2008, the February Extension Information was

information concerning AFG that a reasonable person would expect to have a material

effect on the price or value of AFG Shares within the meaning of ASX Listing Rule 3.1.

87. On 7 February 2008, and at all material times thereafter, AFG was aware of the February

Extension Information within the meaning of ASX Listing Rule 3.1 (as ‘awareness’ is

defined in ASX Listing Rule 19.12).

40

Particulars

i. As at 7 February 2008 one or more of the directors and/or executive officers of AFG had, or

ought reasonably to have, come into possession of the February Extension Information in the

course of the performance of their duties by reason of the matters pleaded at sub-paragraphs

13.a and 13.b.

ii. Further, AFG’s knowledge of the February Extension Information is to be inferred from the



88. On 7 February 2008 AFG, was required, pursuant to ASX Listing Rule 3.1, immediately to

tell ASX the February Extension Information.

89. On 7 February 2008, and at all material times thereafter, the February Extension

Information was information that:

a. AFG had;





90. AFG did not tell ASX the February Extension Information until 27 February 2008.

Particulars

The February Extension Information was told to ASX, for the first time, in the 27 February ASX Letter.

91. By reason of the matters pleaded in paragraphs 86 to 90, from 7 February 2008 AFG

contravened s 674(2) of the CA by not immediately telling ASX the February Extension

Information (Fifth Continuous Disclosure Contravention).

92. The Fifth Continuous Disclosure Contravention was a continuing contravention that

continued until 27 February 2008.

41

K. FURTHER CONTRAVENTIONS

K.1 Debt Financing Reassurance Representation and Disclosure Representation

93. In both the Initial 2007 Annual Report (at page 36) and the Final 2007 Annual Report (at

page 36) AFG stated that:

[AFG] has adopted a policy to ensure that the Company and all of the Group’s listed

controlled entities comply with their continuous disclosure obligations under the ASX

Listing Rules … and the Corporations Act…

[AFG] has put in place mechanisms ensuring compliance with ASX Listing Rules

such that all investors have equal and timely access to material information about the

Company, for example financial performance.

[AFG] immediately notifies the market via an announcement to the ASX of any

information concerning [AFG] or that a reasonable person would expect to have a

material effect on the price or value of any of [AFG’s] securities. That is, [AFG]

publicly releases all price sensitive information through the ASX before disclosing it

elsewhere.

All external communications by [AFG] are reviewed before issue to ensure:

> Factual accuracy;

> No omission of material information; and

> They are timely and expressed in a clear and objective manner.

94. On 21 January 2008, AFG stated that:

[AFG] is conscious of its continuous disclosure obligations and confirms that there

are no developments with regard to [AFG’s] business which require market

announcement…

Specifically:

• [AFG] is not aware of any information that has not been announced, which

could be an explanation for the recent trading in the securities in AFG

• …

• …

• [AFG] confirms that it is in compliance with the listing rules and in particular,

listing rule 3.1.

42

Particulars

AFG Announcement to ASX dated 21 January 2008.

95. On 23 January 2008, AFG stated that:

[AFG] confirms that there are no developments with regard to [AFG’s] business

which require market announcement.

Particulars

AFG Announcement to ASX dated 23 January 2008.

96. At all material times during the Relevant Period AFG represented that its debt financing

and ability to fund its investments was not subject to any undisclosed material risks (Debt

Financing Reassurance Representation).

Particulars

i. The Debt Financing Reassurance Representation was partly express and partly implied.

ii. Insofar as it was express it was in writing and comprised:

A. the 2 August Reassurance;

B. the 16 August Reassurance;

C. the 21 August Announcement Reassurance;

D. the 21 August Investor Presentation Reassurance;

E. the 19 December Reassurance; and

F. the statements pleaded in paragraphs 93 to 95,

(from the time each of those representations and statements were made).

iii. Insofar as it was implied it is to be implied by reason of the matters pleaded at sub-

paragraphs 5.b.i and 5.b.ii.

97. At all material times during the Relevant Period, AFG represented that it had publicly

disclosed, and would publicly disclose, all information that a reasonable person would

expect to have a material effect on the price or value of AFG Shares immediately it was,

or ought reasonably to have been, aware of such information (Disclosure

Representation).

Particulars

i. The Disclosure Representation was partly express and partly implied.

ii. Insofar as it was express it was in writing and comprised the statements pleaded at

paragraphs 93 to 95 (from the time each of those representations and statements were made).

43

iii. Insofar as it was implied it is to be implied by reason of the matters pleaded at sub-

paragraphs 5.b.i and 5.b.ii.

K.2 Misleading Nature of the Debt Financing Reassurance Representation and the

Disclosure Representation

98. By making:

a. the Debt Financing Reassurance Representation; and

b. the Disclosure Representation,



of the CA; and/or




99. The Debt Financing Reassurance Representation was misleading or deceptive or likely to

mislead or deceive:

a. at all material times during the Relevant Period, by reason of the matters pleaded in

paragraphs 14B to 14ED and 27;

b. further or alternatively, at all material times on and after 1 November 2007, by

reason of the matters pleaded in paragraphs 14B to 14ED and 49 to 51;

c. further or alternatively, at all material times on and after 18 December 2007, by

reason of the matters pleaded in paragraphs 14B to 14ED, 59, 60, 62 and 63;

d. further or alternatively, at all material times on and after 9 January 2008, by reason

of the matters pleaded in paragraphs 14B to 14ED and 71 to 74; and

e. further or alternatively, at all material times on and after 7 February 2008, by reason

of the matters pleaded in paragraphs 14B to 14ED and 82 to 85.

100. The Disclosure Representation was misleading or deceptive or likely to mislead or

deceive:

a. at all material times during the Relevant Period, by reason of the matters

constituting the First Disclosure Contravention and/or the Second Disclosure

Contravention;

44

b. further or alternatively, at all material times on and after 1 November 2007, by

reason of the matters constituting the Second Alternative Continuous Disclosure

Contravention;

c. further or alternatively, at all material times on and after 18 December 2007, by

reason of the matters constituting the Third Continuous Disclosure Contravention;

d. further or alternatively, at all material times on and after 9 January 2008, by reason

of the matters constituting the Fourth Continuous Disclosure Contravention; and

e. further or alternatively, at all material times on and after 7 February 2008, by reason

of the matters constituting the Fifth Continuous Disclosure Contravention.

101. Insofar as either or both of:



was a representation with respect to a future matter, the applicants rely on:

c. s 769C of the CA;

d. s 12BB of the ASIC Act; and

e. s 41 of the FTA.







e. s 42 of the FTA,

(individually, the Debt Financing Reassurance Contravention and the Disclosure

Contravention).

45

L. INVOLVEMENT BY COE IN AFG’S CONTINUOUS DISCLOSURE CONTRAVENTIONS

L.1 Coe’s Involvement in the First Disclosure Contravention

103. On 21 August 2007, and at all material times thereafter, Coe was aware of the matters

pleaded in paragraphs 25, 28, 30 and 31.

Particulars

i. Coe’s knowledge is to be inferred from his position as a director, the executive chairman and

the chairman of the Risk Committee, of AFG.

ii. Further particulars will be provided after discovery.

104. On or about 21 August 2007, Coe authorised, or participated in authorising, the making

and lodgement by AFG with ASX of the Initial 2007 Annual Report in the form, or

substantially in the form, in which that document was made and lodged with ASX,

notwithstanding that it omitted the Current Debt Information.

Particulars

i. The applicants refer to the Directors Declaration at page 142 of the Initial 2007 Annual Report.

ii. Further, Coe’s authorisation or participation is to be inferred from his position as a director, the

executive chairman and the chairman of the Risk Committee, of AFG.

iii. Further particulars will be provided after discovery.

105. On or about 21 September 2007, Coe authorised, or participated in authorising, the

making and lodgement by AFG with ASX of the Final 2007 Annual Report in the form, or


notwithstanding that it omitted the Current Debt Information.

Particulars

i. The applicants refer to the Directors Declaration at page 142 of the Final 2007 Annual Report.

ii. Further, Coe’s authorisation or participation is to be inferred from his position as a director, the

executive chairman and the chairman of the Risk Committee, of AFG.

iii. Further particulars will be provided after discovery.

106. On 21 August 2007, and at all material times thereafter until 27 February 2008, or

alternatively 25 February 2008, Coe took no, alternatively no adequate, steps to cause

AFG to tell ASX the Current Debt Information.

107. By reason of the matters pleaded in paragraphs 103 to 106, Coe was involved in the First

Disclosure Contravention within the meaning of s 79 of the CA, in that he:

46

a. aided, abetted, counselled or procured; or

b. alternatively, was knowingly concerned in, or party to,

the First Disclosure Contravention.

108. By reason of the matters pleaded in paragraph 107, Coe contravened s 674(2A) of the CA

with respect to the First Disclosure Contravention.

109. Coe’s contravention of s 674(2A) of the CA with respect to the First Disclosure

Contravention was a continuing contravention that continued until 27 February 2008, or


L.1A Coe’s Involvement in the Second Disclosure Contravention

109A. On 21 August 2007, and at all material times thereafter, Coe was aware of the matters

pleaded in paragraphs 14B to 14ED, 34A, 34C and 34D.

Particulars

The applicants repeat the particulars sub-joined to paragraph 103.

109B. On or about 21 August 2007, Coe authorised, or participated in authorising, the making



notwithstanding that it omitted the Market Capitalisation Review Terms and the Review

Event Affected Borrowings.

Particulars


109C. On or about 21 September 2007, Coe authorised, or participated in authorising, the



notwithstanding that it omitted the Market Capitalisation Review Terms and the Review

Event Affected Borrowings.

Particulars


109D. On 21 August 2007, and at all material times thereafter until 27 February 2008, or


47

AFG to tell ASX the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings.

109E. By reason of the matters pleaded in paragraphs 109A to 109D, Coe was involved in the

Second Disclosure Contravention within the meaning of s 79 of the CA, in that he:



the Second Disclosure Contravention.

109F. By reason of the matters pleaded in paragraph 109E, Coe contravened s 674(2A) of the

CA with respect to the Second Disclosure Contravention.

109G. Coe’s contravention of s 674(2A) of the CA with respect to the Second Disclosure

Contravention was a continuing contravention that continued until 27 February 2008, or


L.2 Coe’s Involvement in the Second Alternative Continuous Disclosure Contravention

110. On 1 November 2007, and at all material times thereafter, Coe was aware of the matters

pleaded in paragraphs 14B to 14ED, 49 to 52, 54 and 55.

Particulars


111. On 1 November 2007, and at all material times thereafter until 27 February 2008, or


AFG to tell ASX the Market Capitalisation Review Terms and/or the Review Event

Affected Borrowings.

112. By reason of the matters pleaded in paragraphs 110 and 111, Coe was involved in the

Second Alternative Continuous Disclosure Contravention within the meaning of s 79 of the

CA, in that he:



the Second Alternative Continuous Disclosure Contravention.


with respect to the Second Alternative Continuous Disclosure Contravention.

48

114. Coe’s contravention of s 674(2A) of the CA with respect to the Second Alternative

Continuous Disclosure Contravention was a continuing contravention that continued until


L.3 Coe’s Involvement in the Third Continuous Disclosure Contravention

115. On 18 December 2007, and at all material times thereafter, Coe was aware of the matters

pleaded in paragraphs 14B to 14ED, 59, 60, 62 to 64, 66 and 67.

Particulars


116. On 18 December 2007, and at all material times thereafter until 27 February 2008, or


AFG to tell ASX:


b. in the alternative, the occurrence of the December Review Event.


Third Continuous Disclosure Contravention within the meaning of s 79 of the CA, in that

he:



the Third Continuous Disclosure Contravention.


with respect to the Third Continuous Disclosure Contravention.

119. Coe’s contravention of s 674(2A) of the CA with respect to the Third Continuous

Disclosure Contravention was a continuing contravention that continued until


L.4 Coe’s Involvement in the Fourth Continuous Disclosure Contravention

120. On 9 January 2008, and at all material times thereafter, Coe was aware of the matters

pleaded in paragraphs 14B to 14ED, 61, 71 to 75, 77 and 78.

Particulars


49

121. On 9 January 2008, and at all material times thereafter until 27 February 2008, or


AFG to tell ASX:


b. in the alternative, the occurrence of the January Review Event.


Fourth Continuous Disclosure Contravention within the meaning of s 79 of the CA, in that

he:



the Fourth Continuous Disclosure Contravention.


with respect to the Fourth Continuous Disclosure Contravention.

124. Coe’s contravention of s 674(2A) of the CA with respect to the Fourth Continuous

Disclosure Contravention was a continuing contravention that continued until


L.5 Coe’s Involvement in the Fifth Continuous Disclosure Contravention

125. On 7 February 2008, and at all material times thereafter, Coe was aware of the matters


Particulars


126. On 7 February 2008, and at all material times thereafter until 27 February 2008, Coe took

no, alternatively no adequate, steps to cause AFG to tell ASX the February Extension

Information.


Fifth Continuous Disclosure Contravention within the meaning of s 79 of the CA, in that

he:


50


the Fifth Continuous Disclosure Contravention.


with respect to the Fifth Continuous Disclosure Contravention.

129. Coe’s contravention of s 674(2A) of the CA with respect to the Fifth Continuous Disclosure

Contravention was a continuing contravention that continued until 27 February 2008.

M. MISLEADING OR DECEPTIVE CONDUCT BY COE AND/OR INVOLVEMENT BY COE

IN AFG’S MISLEADING OR DECEPTIVE CONDUCT CONTRAVENTIONS

M.1 First Current Debt Representation and Second Current Debt Representation


pleaded in paragraph 25.

Particulars


131. On or about 21 August 2007 Coe authorised, or participated in authorising, the making



including the inclusion therein of the First Current Debt Representation.

Particulars


132. Further, or in the alternative to paragraph 131, on 21 August 2007, and at all material

times thereafter until 27 February 2008, or alternatively 25 February 2008, Coe took no,

alternatively no adequate, steps to cause AFG to withdraw or otherwise correct the First

Current Debt Representation.

133. On or about 21 September 2007 Coe authorised, or participated in authorising, the



including the inclusion therein of the Second Current Debt Representation.

Particulars


51

134. Further, or in the alternative to paragraph 133, on 21 September 2007, and at all material


alternatively no adequate, steps to cause AFG to withdraw or otherwise correct the

Second Current Debt Representation.

135. By reason of the matters pleaded in paragraphs 131 to 134, Coe engaged in conduct:

a. in relation to a financial product or a financial service within the meaning of s 1041H

of the CA; and/or

b. in trade or commerce in relation to financial services within the meaning of s 12DA


c. in trade or commerce within the meaning of s 42 of the FTA.

136. By reason of the matters pleaded in paragraphs 36, 44 and 135 Coe contravened:

a. s 1041H of the CA; and/or

b. s 12DA of the ASIC Act; and/or

c. s 42 of the FTA.

137. In the alternative to paragraph 136, by reason of the matters pleaded in paragraphs 130 to

134 Coe was involved in the First Current Debt Contravention and/or the Second Current

Debt Contravention within the meaning of:

a. s 79 of the CA; and

b. s 61 of the FTA,

in that he:

c. aided, abetted, counselled or procured; or

d. alternatively, was knowingly concerned in, or party to,

the First Current Debt Contravention and/or the Second Current Debt Contravention.

M.2 First Financial Report Compliance Representation and Second Financial Report

Compliance Representation


pleaded in paragraphs 25 and 26.

Particulars


52

139. On 21 September 2007, and at all material times thereafter, Coe was aware of the matters


Particulars


140. On or about 21 August 2007 Coe authorised, or participated in authorising, the making



including the inclusion therein of the First Financial Report Compliance Representation.

Particulars


141. Further, or in the alternative to paragraph 140, on 21 August 2007, and at all material


alternatively no adequate, steps to cause AFG to withdraw or otherwise correct the First

Financial Report Compliance Representation.

142. On or about 21 September 2007 Coe authorised, or participated in authorising, the



including the inclusion therein of the Second Financial Report Compliance

Representation.

Particulars


143. Further, or in the alternative to paragraph 142, on 21 September 2007, and at all material


alternatively no adequate, steps to cause AFG to withdraw or otherwise correct the

Second Financial Report Compliance Representation.

144. By reason of the matters pleaded in paragraphs 140 to 143, Coe engaged in conduct:


of the CA; and/or




53

145. By reason of the matters pleaded in paragraphs 37, 45 and 144 Coe contravened:



c. s 42 of the FTA.


143 Coe was involved in the First Financial Report Compliance Contravention and/or the

Second Financial Report Compliance Contravention within the meaning of:


b. s 61 of the FTA,

in that he:



the First Financial Report Compliance Contravention and/or the Second Financial Report

Compliance Contravention.

M.3 Debt Financing Reassurance Representation


pleaded in paragraphs 14B to 14ED and 27.

Particulars



pleaded in paragraphs 14B to 14ED and 49 to 51.

Particulars



pleaded in paragraphs 14B to 14ED, 59, 60, 62 and 63.

Particulars




54

Particulars




Particulars


152. Coe authorised, or participated in authorising, the making and lodgement by AFG with

ASX of the documents referred to below on or about the date that each document bears,

in the form, or substantially in the form, in which those documents were made and lodged

with ASX:

a. the document pleaded in paragraph 18, containing the 2 August Reassurance;

b. the document pleaded in paragraph 19, containing the 16 August Reassurance;

c. the document pleaded in paragraph 20, containing the 21 August Announcement

Reassurance;

d. the document pleaded in paragraph 21, containing the 21 August Investor

Presentation Reassurance;

e. the document pleaded in paragraph 61, containing the 19 December Reassurance;

and

f. the documents pleaded in paragraphs 93 to 95.

Particulars

i. Coe’s authorisation or participation is to be inferred from his position as a director, the executive

chairman and the chairman of the Risk Committee, of AFG.

ii. Further particulars will be provided after discovery.

153. Further, or in the alternative to paragraph 152, at all material times during the Relevant

Period Coe took no, alternatively no adequate, steps to cause AFG to withdraw or

otherwise correct the Debt Financing Reassurance Representation.

154. By reason of the matters pleaded in paragraphs 152 and/or 153, Coe engaged in conduct:


of the CA; and/or

55




155. By reason of the matters pleaded in paragraphs 99 and 154 Coe contravened:



c. s 42 of the FTA.


153 Coe was involved in the Debt Financing Reassurance Contravention within the

meaning of:


b. s 61 of the FTA,

in that he:



the Debt Financing Reassurance Contravention.

M.4 Disclosure Representation


pleaded in paragraphs 14B to 14ED, 25, 28, 30, 31, 34A, 34C and 34D.

Particulars



pleaded in paragraphs 14B to 14ED, 49 to 52, 54 and 55.

Particulars



pleaded in paragraphs 14B to 14ED, 59, 60, 62 to 64, 66 and 67.

56

Particulars




Particulars




Particulars


162. Coe authorised, or participated in authorising, the making and lodgement by AFG with

ASX of the documents pleaded in paragraphs 93 to 95 on or about the date that each

document bears, in the form, or substantially in the form, in which those documents were

made and lodged with ASX.

Particulars


163. Further, or in the alternative to paragraph 162, at all material times during the Relevant

Period Coe took no, alternatively no adequate, steps to cause AFG to withdraw or

otherwise correct the Disclosure Representation.

164. By reason of the matters pleaded in paragraphs 162 and/or 163, Coe engaged in conduct:


of the CA; and/or




165. By reason of the matters pleaded in paragraphs 100 and 164 Coe contravened:



c. s 42 of the FTA.

57


163 Coe was involved in the Disclosure Contravention within the meaning of:


b. s 61 of the FTA,

in that he:



the Disclosure Contravention.

N. KPMG CLAIM

N.1 KPMG Retainer

167. On or about 15 February 2007 AFG retained KPMG for the purpose of:

a. auditing, as required by s 301 of the CA, the 2007 Financial Report to be included in

the 2007 Annual Reports; and

b. reviewing, as required by s 302 of the CA, the consolidated financial statements to

be included in the Initial Half-Year Report and the Reissued Half-Year Report,

(KPMG Retainer).

Particulars

The KPMG Retainer comprised:

i. A letter from KPMG to ‘The Chair, Audit and Compliance Committee’ of AFG dated 15 February

2007 (Engagement Letter).

ii. Two letters from KPMG to ‘Mr Tim Dodd, Chief Financial Officer’ of AFG dated 26 April 2007.

Further particulars of the KPMG Retainer may be provided after discovery.

168. As auditor of AFG for the year ended 30 June 2007 KPMG (through Mr Whittingham) was

obligated (Statutory Auditing Obligations):

a. pursuant to s 307 of the CA to form an opinion as to whether:

i. the 2007 Financial Reports in the 2007 Annual Reports were in accordance

with the CA, including whether they complied with the accounting standards,

and whether they gave a true and fair view of the financial position and

performance of AFG and of the Allco Group; and

58

ii. whether KPMG had been given all information, explanation and assistance

necessary for the conduct of the audit; and

b. pursuant to s 307A of the CA to conduct the audit in accordance with applicable

auditing standards.

169. It was a term of the KPMG Retainer that KPMG would:

a. in providing its services pursuant to the KPMG Retainer, use all reasonable

commercial efforts to provide those services in an efficient and timely manner, using

the necessary skill and expertise to an appropriate professional standard; and

b. use reasonable skill and care in providing services pursuant to the KPMG Retainer.

Particulars

The term set out in sub-paragraph a. was express and contained in cl 2.1 of the ‘KPMG Terms and

Conditions of Business’ which was attached to the Engagement Letter. The term set out in sub-

paragraph b. was implied to give business efficacy to the relationship between KPMG and the entities

KPMG was required to audit pursuant to the KPMG Retainer, and to give content to the term set out

in sub-paragraph a. Further particulars may be provided after discovery.

N.2 KPMG Conduct

170. From a time in 2007 presently unknown to the applicants and prior to 21 August 2007,

Mr Whittingham and other persons acting on behalf of KPMG and/or at the direction or

with the consent or agreement of KPMG and/or Mr Whittingham in providing professional

accounting and auditing services to KPMG, including conducting the Statutory Auditing

Obligations and performing work under the KPMG Retainer:

a. had access to and made reference to working papers from:

i. KPMG’s review of AFG’s half year accounts to 31 December 2006; and

ii. the review conducted by KPMG Transaction Services (Australia) Pty Ltd in

preparation of the Independent Accountant’s Report dated 28 April 2006 in

connexion with the proposed merger between AFG (then known as Record

Investments Ltd) and the company then known as Allco Finance Group Ltd;

b. attended at the premises at which business records of AFG were held;

c. required officers and employees of AFG to provide KPMG with:

i. access to the books of AFG and the Allco Group; and

ii. information, explanations and other assistance to enable KPMG to form

opinions about the books of AFG and the Allco Group;

59

d. had access to facility agreements and other information concerning the amount and

maturity date of interest-bearing loans and borrowings of AFG and the Allco Group,

including in respect of borrowings for:

i. the Mobius programme (operated by Mobius Financial Services Pty Ltd, a

subsidiary of AFG which operated a sub-prime mortgage lending business);

and

ii. the Gateway programme;

e. had access to board papers and board minutes of AFG;

f. had access to and reviewed documents which set out, inter alia, processes,

procedures, guidance and other material relevant to the conduct of KPMG’s audit

(including the need to consider the reliability of management representations and to

corroborate management representations by reviewing supporting evidence); and

g. had access to standard tests and guidance relevant to the classification of loans and

borrowings as current or non-current.

Particulars

Particulars will be provided after discovery.

171. KPMG engaged in the conduct pleaded in paragraph 170 for the purpose of performing

the Statutory Auditing Obligations and their obligations pursuant to the KPMG Retainer.

N.3 KPMG Contravening Conduct

172. On or about:

a. a date prior to or on 21 August 2007 which is presently unknown to the applicants,

KPMG represented to the directors of AFG; further or alternatively

b. 21 August 2007 at the time that AFG released the 2007 Financial Report contained

in the Initial 2007 Annual Report, KPMG represented to, inter alia, the market of

investors and potential investors in AFG including the applicants;

that or to the effect that:

c. KPMG had conducted an independent audit, in accordance with Australian Auditing

Standards, of the 2007 Financial Report contained in the Initial 2007 Annual Report;

d. KPMG had signed the audit report in the Initial 2007 Annual Report;

e. KPMG had formed the opinion that the 2007 Financial Report contained in the Initial

2007 Annual Report for the year ended 30 June 2007 complied with AASB 101 and

60

AASB 132, and gave a true and fair view of the financial position and performance

of AFG and the Allco Group;

f. KPMG had used the necessary skill and expertise to an appropriate professional

standard and/or exercised reasonable skill and care in undertaking the audit of the

2007 Financial Report contained in the Initial 2007 Annual Report and in giving its

audit opinion as to the 2007 Financial Report; and

g. KPMG had reasonable grounds, based on an adequate examination of the books

and records of AFG, for the opinions pleaded in e. and f. above,

(August 2007 Audit Representations).

Particulars

The August 2007 Audit Representations were in writing and to be implied. The representations in c.,

d. and e. were in writing in the Independent Auditor’s Report dated 21 August 2007 included in the

Initial 2007 Annual Report (at pages 143-4) delivered by KPMG to AFG, and then released by AFG to

the ASX on or about 21 August 2007. The representations in f. and g. were to be implied from the

conduct of KPMG in making the other representations set out above, coupled with the absence of

any or any adequate reservation or qualification to those representations. The August 2007 Audit

Representations were relied upon by the applicants in making decisions to purchase AFG Shares.

173. At the time of the making of the August 2007 Audit Representations:

a. KPMG’s audit of the 2007 Financial Report contained in the Initial 2007 Annual

Report had not been completed in accordance with Australian Auditing Standards;

b. KPMG had not used the necessary skill and expertise to an appropriate professional

standard and/or exercised reasonable skill and care in undertaking the audit of the

2007 Financial Report contained in the Initial 2007 Annual Report and in giving its

audit opinion as to the 2007 Financial Report; and

c. KPMG did not have reasonable grounds for the opinions pleaded in sub-paragraphs

172.e and 172.f.

Particulars

i. KPMG failed to ascertain that the total current interest-bearing loans and borrowings of AFG

and the Allco Group as at 30 June 2007 were misstated, and failed to ascertain the matters


ii. KPMG failed adequately to consider whether any part of the interest-bearing loans and

borrowings ought to be classified as current rather than non-current for the purposes of AASB

101.

61

iii. KPMG failed to obtain sufficient appropriate audit evidence upon which to justify the non-

classification of the interest-bearing loans and borrowings the subject of the Current Debt

Information as current.

iiiA. KPMG failed to obtain sufficient appropriate audit evidence upon which to justify the non-

disclosure of the Market Capitalisation Review Terms and/or the Review Event Affected

Borrowings as at 30 June 2007.

iv. KPMG failed to gain an adequate understanding of AFG and the Allco Group, sufficient to

identify and assess risks of material misstatement in the 2007 Financial Report in relation to the

classification of, and associated disclosure of, interest-bearing loans and borrowings.

v. KPMG failed to conduct the audit of the 2007 Financial Report in relation to the classification of,

and associated disclosure of, interest-bearing loans and borrowings with a sufficient level of

professional scepticism recognising that circumstances may exist that cause the financial report

to be materially misstated.

vi. Further particulars may be provided after discovery.

174. By making the August 2007 Audit Representations and each of them, KPMG made a

statement or disseminated information which:

a. by reason of the matters pleaded in paragraph 173 was, at the time they were

made, and at all material times during the Relevant Period, false in a material

particular, or materially misleading; and

b. was likely to:

i. induce persons in this jurisdiction to acquire financial products, namely, AFG

Shares; or

ii. in the alternative, have the effect of increasing, maintaining or stabilising the

price for trading in financial products, namely, AFG Shares, on a financial

market operated in this jurisdiction, namely, ASX.

175. At the time of the making of the August 2007 Audit Representations and each of them,

KPMG ought reasonably to have known that they were false in a material particular, or

were materially misleading.

176. In the alternative to paragraphs 174 and 175, by making the August 2007 Audit

Representations and each of them, KPMG engaged in conduct:


of the CA; and/or

62




177. By reason of the matters pleaded in paragraph 173, at the time they were made, and at all

material times during the Relevant Period, the August 2007 Audit Representations and

each of them were misleading or deceptive or likely to mislead or deceive.

178. In the premises, by making the August 2007 Audit Representations and each of them,

KPMG contravened:

a. s 1041E of the CA; and/or

b. s 1041H of the CA; and/or

c. s 12DA of the ASIC Act; and/or

d. s 42 of the FTA,

(KPMG Contravening Conduct).

O. LOSS AND DAMAGE

179. During the Relevant Period the applicants and Group Members acquired interests in AFG

Shares.

Particulars

During the Relevant Period the first applicant acquired interests in AFG Shares as follows:

i. 4,000 Shares on 28 August 2007 for a total consideration of A$35,420.70;

ii. 4,000 Shares on 31 August 2007 for a total consideration of A$35,058.90;

iii. 4,000 Shares on 2 October 2007 for a total consideration of A$38,194.50;

iv. 4,000 Shares on 16 October 2007 for a total consideration of A$35,903.10; and

v. 6,000 Shares on 11 December 2007 for a total consideration of A$45,644.21.

During the Relevant Period the second applicants acquired interests in AFG Shares as follows:

vi. 4,000 Shares on 28 August 2007 for a total consideration of A$35,420.70;

vii. 4,000 Shares on 31 August 2007 for a total consideration of A$35,058.90

viii. 4,000 Shares on 2 October 2007 for a total consideration of A$38,174.20;

ix. 4,000 Shares on 16 October 2007 for a total consideration of A$35,862.90;

x. 4,000 Shares on 10 December 2007 for a total consideration of A$29,913.30;

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xi. 5,000 Shares on 13 December 2007 for a total consideration of A$38,596.50; and

xii. 10,000 Shares on 8 February 2008 for a total consideration of NZ$35,193.27.

Particulars of the acquisitions of Group Members will be provided after the trial of the applicants’

claims.

180. The applicants and Group Members acquired their interests in AFG Shares in a market:

a. regulated by, inter alia, the ASX Listing Rules and ss 674(2) and 1041H of the CA;

b. where the price or value of AFG Shares would reasonably be expected to have

been informed or affected by information disclosed in accordance with the ASX

Listing Rules and ss 674(2) and 1041H of the CA;

c. being a market in which misleading or deceptive statements had been made that a

reasonable person would expect to have a material effect on the price or value of

AFG Shares; and

d. in which the falls in the price of AFG Shares during and after the Relevant Period

were a result of:

i. the First Disclosure Contravention;

iA. the Second Disclosure Contravention;

ii. the Second Alternative Continuous Disclosure Contravention;

iii. the Third Continuous Disclosure Contravention;

iv. the Fourth Continuous Disclosure Contravention;

v. the Fifth Continuous Disclosure Contravention;

vi. the contraventions by Coe of s 674(2A) of the CA pleaded in paragraphs 108,

109, 109F, 109G, 113, 114, 118, 119, 123, 124, 128 and 129;

vii. the First Current Debt Contravention;

viii. the Second Current Debt Contravention;

ix. the First Financial Report Compliance Contravention;

x. the Second Financial Report Compliance Contravention;

xi. the Debt Financing Reassurance Contravention;

xii. the Disclosure Contravention;

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xiii. the contraventions by Coe of s 1041H of the CA, s 12DA of the ASIC Act

and/or s 42 of the FTA pleaded in paragraphs 136, 145, 155 and 165; and/or

xiv. the KPMG Contravening Conduct,

(together, the Contraventions).

181. During the Relevant Period the Contraventions (or any one or a combination of them)

caused the market price for AFG Shares traded on ASX to be substantially greater than:

a. their true value; and/or

b. the market price that would have prevailed but for the Contraventions.

182. Further, in their decision to acquire interests in AFG Shares the applicants and some

Group Members relied on:

a. the First Current Debt Representation, and would not have purchased AFG Shares

at the prevailing market price at the time of purchase if they had been aware of the

matters pleaded in paragraph 25;

b. the First Financial Report Compliance Representation, and would not have

purchased AFG Shares at the prevailing market price at the time of purchase if they

had been aware of the matters pleaded in paragraph 26;

c. the Second Current Debt Representation, and would not have purchased AFG

Shares at the prevailing market price at the time of purchase if they had been aware

of the matters pleaded in paragraph 25;

d. the Second Financial Report Compliance Representation, and would not have

purchased AFG Shares at the prevailing market price at the time of purchase if they

had been aware of the matters pleaded in paragraph 42;

e. the Debt Financing Reassurance Representation, and would not have purchased

AFG Shares at the prevailing market price at the time of purchase if they had been

aware of the matters pleaded in sub-paragraphs 99.a., b., c., d. and/or e.;

f. the Disclosure Representation, and would not have purchased AFG Shares at the

prevailing market price at the time of purchase if they had been aware of the matters

pleaded in sub-paragraphs 100.a., b., c., d. and/or e.; and/or

g. the August 2007 Audit Representations, and would not have purchased AFG Shares

at the prevailing market price at the time of purchase if they had been aware of the

matters pleaded in paragraph 173.

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Particulars

i. The identity of all those Group Members who relied directly on each of the First Current Debt

Representation, the First Financial Report Compliance Representation, the Second Current

Debt Representation, the Second Financial Report Compliance Representation, the Debt

Financing Reassurance Representation, the Disclosure Representation and the August 2007

Audit Representations are not known with the current state of the applicants’ knowledge and

cannot be ascertained unless and until those advising the applicants take detailed instructions

from all Group Members on individual issues relevant to the determination of those individual

Group Members’ claims; those instructions will be obtained (and particulars of the identity of

those Group Members will be provided) following the determination of common issues and if

and when a determination is to be made of the individual claims of those Group Members;

ii. What can be said with the current state of the applicants’ knowledge is that no Group Member

will make a claim based upon direct reliance unless, following individual enquiry, it is

ascertained that those Group Members purchased AFG Shares:

A. after reading such of those representations which were in writing and were contained in

the 2007 Financial Report or the Initial 2007 Annual Report or the Final 2007 Annual

Report, the 2 August Reassurance, the 16 August Reassurance, the 21 August

Announcement Reassurance, the 21 August Investor Presentation Reassurance, the 19

December Reassurance, or the statements pleaded in paragraphs 93 to 95 (as

applicable) (Express Statements); and/or

B. after reading the Express Statements and relying upon the implied representations

pleaded as arising from any of them; or

C. notwithstanding that the Group Member did not read the Express Statements, but in

circumstances where in the case of the First Financial Report Compliance

Representation and the Second Financial Report Compliance Representation and the

August 2007 Audit Representations the Group Member was aware and purchased in

reliance upon either:

1. the fact that the Initial 2007 Annual Report or the Final 2007 Annual Report had

been (or would have been) lodged by AFG and that such report would likely have,

by reason of its nature, contained representations such as those of the First

Financial Report Compliance Representation and the Second Financial Report

Compliance Representation and/or the August 2007 Audit Representations which

were in writing; or

2. in the case of the First Financial Report Compliance Representation and the

Second Financial Report Compliance Representation, the fact that any financial

report contained in such Initial 2007 Annual Report or Final 2007 Annual Report

was published meant that AFG and its directors had represented that such

financial report was prepared in accordance with Australian Accounting

Standards and AFG’s obligations under the CA;

3. in the case of the August 2007 Audit Representations, the fact that any financial

report contained in such Initial 2007 Annual Report or Final 2007 Annual Report

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was audited meant an auditor had represented (as pleaded in sub-

paragraphs 172.f. and g.) that the auditor had exercised reasonable skill and care

in undertaking the audit and in giving an audit opinion and/or had reasonable

grounds, based on an adequate examination of the books and records of AFG,

for any opinions expressed by the auditor in the Initial 2007 Annual Report or the

Final 2007 Annual Report.

183. The applicants and Group Members have suffered loss and damage by, or which resulted

from, the Contraventions (or any one or combination of the Contraventions).

Particulars

The loss suffered by the applicants and Group Members is:

i. the difference between the price at which they acquired their interest in AFG Shares and the

true value of that interest;

ii. alternatively, the difference between the price at which they acquired their interest in AFG

Shares and the market price that would have prevailed but for the Contraventions or any of

them;

iii. alternatively, the difference between the price at which they acquired their interest in AFG

Shares and whatever is ‘left in the hand’ or has been realised upon a sale modified to take into

account any part of the movement in the market price of the AFG Shares which did not ‘result

from’ the Contraventions. With respect to the first applicant, the amount realised upon sale of

the Shares referred to in:

A. paragraphs i. and ii. of the particulars sub-joined to paragraph 179 was A$71,233.00 on

27 September 2007; and

B. paragraphs iii. to v. of the particulars sub-joined to paragraph 179 was A$12,044.95 on

27 February 2008.

With respect to the second applicants, the amount realised upon sale of the Shares referred to

in:

C. paragraph vi. of the particulars sub-joined to paragraph 179 was A$35,536.90 on

27 September 2007;

D. paragraph vii. of the particulars sub-joined to paragraph 179 was A$36,531.90 on

28 September 2007;

E. paragraph xii. of the particulars sub-joined to paragraph 179 was A$8,595.50 on

27 February 2008; and

F. paragraphs viii. to xi. of the particulars sub-joined to paragraph 179 was A$8,925.00 on

7 March 2008 (pursuant to an off-market transfer, at market value, to the second

applicants in their personal capacity);

iv. in addition to the loss in i., ii. and iii., the loss of the opportunity to achieve a reasonable rate of

return on the moneys used to purchase the interest in AFG Shares.

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P. COMMON QUESTIONS OF LAW OR FACT

184. The questions of law or fact common between the claims of the applicants and Group

Members are as set out in the further amended originating application that this further

amended statement of claim accompanies.

Q. GLOSSARY

185. In this Statement of Claim:

2 August Reassurance has the meaning set out in paragraph 18;

16 August Reassurance has the meaning set out in paragraph 19;

21 August Announcement Reassurance has the meaning set out in paragraph 20;

21 August Investor Presentation Reassurance has the meaning set out in

paragraph 21;

19 December Reassurance has the meaning set out in paragraph 61;

25 February Announcement means AFG’s announcement to ASX dated 25 February

2008 titled ‘Allco Finance Group (ASX:AFG) – Business Update and Financial Results for

the Half Year ended 31 December 2007’;

25 February Investor Presentation means AFG’s investor presentation dated

25 February 2008 titled ‘Business Update and Half Year Results Announcement – Half

Year Ended 31 December 2007’;

27 February Announcement means AFG’s announcement to ASX dated 27 February

2008 titled ‘Allco Finance Group (ASX: AFG) – Limited recourse maturity split’;

27 February ASX Letter means the letter from AFG to ASX dated 27 February 2008 titled

‘Allco Finance Group Limited (ASX:AFG) – response to ASX query’;

2007 Annual Reports means, collectively, the Initial 2007 Annual Report and the Final

2007 Annual Report;

2007 Financial Report means the Financial Report of AFG for the year ended 30 June

2007 contained in the Initial 2007 Annual Report and the Final 2007 Annual Report (as the

context allows);

68

2008 Financial Report means the Financial Report of AFG for the year ended 30 June

2008;

AASB 101 means Australian Accounting Standard AASB 101;

AASB 132 means Australian Accounting Standard AASB 132;

AFG means the first respondent;

AFG’s Accounting Obligations has the meaning set out in sub-paragraph 12.a;

Allco Group means AFG and its controlled entities;

ASIC Act means the Australian Securities and Investments Commission Act 2001 (Cth);

ASX means Australian Securities Exchange Ltd;

ASX Listing Rules means the Listing Rules of ASX;

August 2007 Audit Representations has the meaning set out in paragraph 172;

CA means the Corporations Act 2001 (Cth);

Cash Advance Facility Agreement has the meaning set out in sub-paragraph 14B.b;

CBA means Commonwealth Bank of Australia;

Coe means David Raymond Coe;

Contraventions has the meaning set out in paragraph 180;

Current Debt Information has the meaning set out in paragraph 25;

Debt Financing Reassurance Contravention has the meaning set out in paragraph 102;

Debt Financing Reassurance Representation has the meaning set out in paragraph 96;

December Review Event has the meaning set out in paragraph 59;

December Review Event Consequences has the meaning set out in paragraph 60;

December Review Event Information has the meaning set out in paragraph 64;

Disclosure Contravention has the meaning set out in paragraph 102;

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Disclosure Representation has the meaning set out in paragraph 97;

Engagement Letter means the letter from KPMG to ‘The Chair, Audit and Compliance

Committee’ of AFG dated 15 February 2007;

February Extension Information has the meaning set out in paragraph 83;

Fifth Continuous Disclosure Contravention has the meaning set out in paragraph 91;

Final 2007 Annual Report means the Annual Report of AFG for the year ended

30 June 2007 that was made and lodged with ASX on 21 September 2007;

First Current Debt Contravention has the meaning set out in paragraph 38;

First Current Debt Representation has the meaning set out in paragraph 23;

First Disclosure Contravention has the meaning set out in paragraph 33;

First Financial Report Compliance Contravention has the meaning set out in

paragraph 38;

First Financial Report Compliance Representation has the meaning set out in

paragraph 24;

Fourth Continuous Disclosure Contravention has the meaning set out in

paragraph 80;

FTA means the Fair Trading Act 1987 (NSW) (as in force prior to 1 January 2011);

Global Credit Market Tightening has the meaning set out in paragraph 15;

Group Members are those persons identified in paragraph 3;

Initial 2007 Annual Report means the Annual Report of AFG for the year ended

30 June 2007 that was made and lodged with ASX on 21 August 2007;

Initial Half-Year Report means the Half-Year Financial Report of AFG for the half year

ended 31 December 2007 that was lodged with ASX on 25 February 2008;

January Review Event has the meaning set out in paragraph 71;

January Review Event Consequences has the meaning set out in paragraph 72;

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January Review Event Information has the meaning set out in paragraph 75;

KPMG means the third respondent;

KPMG Contravening Conduct has the meaning set out in paragraph 178;

KPMG Retainer has the meaning set out in paragraph 167;

Majority Participants has, in relation to the Subscription Agreement, the meaning set out

in sub-paragraph 14C.c, and, in relation to the Syndicated Loan Agreement, the meaning

set out in sub-paragraph 14E.c;

Market Capitalisation Review Terms has the meaning set out in sub-paragraph 25A.b;

Notification Period has the meaning set out in paragraph 82;

Reissued Half-Year Report means the ‘Reissued Half-Year Financial Report’ of AFG for

the half year ended 31 December 2007 attached to the 27 February Announcement;

Relevant Period means the period commencing on 21 August 2007 and concluding on

27 February 2008;

Review Event has the meaning set out in sub-paragraphs 14C.a, and 14D.a and 14E.a;

Review Event Affected Borrowings has the meaning set out in paragraph 25B34A;

Second Alternative Continuous Disclosure Contravention has the meaning set out in

paragraph 57;

Second Current Debt Contravention has the meaning set out in paragraph 46;

Second Current Debt Representation has the meaning set out in paragraph 40;

Second Disclosure Contravention has the meaning set out in paragraph 34F;

Second Financial Report Compliance Contravention has the meaning set out in

paragraph 46;

Second Financial Report Compliance Representation has the meaning set out in

paragraph 41;

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Senior Debt Facilities means, collectively, the Subscription Agreement, the Cash

Advance Facility Agreement and the Syndicated Loan Agreement;

Shares means ordinary shares in AFG;

Statutory Auditing Obligations has the meaning set out in paragraph 168;

Subscription Agreement has the meaning set out in sub-paragraph 14B.a; and

Syndicated Loan Agreement has the meaning set out in sub-paragraph 14B.c;

Third Continuous Disclosure Contravention has the meaning set out in paragraph 69;

and

WBC means Westpac Banking Corporation.

AND THE APPLICANTS CLAIM ON BEHALF OF THEMSELVES AND GROUP MEMBERS

THE RELIEF SET OUT IN THE FURTHER AMENDED ORIGINATING APPLICATION

Date: 25 February11 November 2014

Signed by Steven Foale Lawyer for the Applicants

This pleading was prepared by Steven Foale, lawyer, and M B J Lee SC and William Edwards

of counsel.

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Certificate of lawyer

I Steven Mark Foale certify to the Court that, in relation to the further amended statement of

claim filed on behalf of the Applicants, the factual and legal material available to me at present

provides a proper basis for each allegation in the pleading.

Date: 25 February11 November 2014

Signed by Steven Foale Lawyer for the Applicants

further amended statement of claim · filed on behalf of (name & role of party) blairgowrie...

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