Collapsed broker BBY ‘used a psychic’ to generate its forecasts

The collapsed broker habitually relied on a psychic to generate revenue forecasts, a court has heard.

Glenn Rosewall leaving the BBY Administrators Meeting in Sydney last year.

BBY chairman and major shareholder Glenn Rosewall used a psychic to provide budget forecasts for the stockbroker and its advisers that he would check against figures from his own finance department, a court has heard.

In an afternoon of extraordinary testimony, former finance and strategy manager April Yuen fought back tears as she described feeling like a “punching bag’’ in the firm and being under “a lot of pressure’’ to delay or withhold payments to creditors after telling them they would be paid.

She told the Supreme Court of NSW that Mr Rosewall had instructed her to leave a column in the firm’s budgets and forecasts for psychic and professed vibrational healer Nevine Rottinger to include her own figures for revenue to be generated by the firm and individual advisers.

Ms Rottinger is reported to have been on the company payroll for two years and to have been seen walking the floor of the Sydney-based firm.

Ms Yuen said Mr Rosewall would sign off on the budget estimates but would “take the numbers to Nevine to see if they were OK’’.

“They would take the numbers to finance and ask us to leave a column for Nevine.”

She described a process in which each broker would be interviewed and forecast for their revenue provided and those figures would then be taken to Ms Rottinger and “Nevine would put the number in there’’ before the firm decided what was reasonable.

Giving a second day of testimony in a liquidators’ hearing into the collapse of BBY, Ms Yuen said she had used her own initiative to prepare a cashflow statement for the company in December 2014 that revealed a “disastrous’’ number.

But when she showed the figures to “one or both’’ of Mr Rosewall and chief executive Arun Maharaj she was told the revenue figure was wrong and she should use the budget figure rather than the actual revenue.

BBY collapsed in May 2015 and was estimated last week by KPMG partner Stephen Vaughan to have a shortfall of assets over liabilities of $23 million.

In a report to creditors last week Mr Vaughan said Australia’s once biggest options trading firm and one of its biggest stockbrokers may have traded while insolvent since 2011 when it bought the Stonebridge Securities business and set out to grow its options business.

The report said BBY withdrew $20m from an account used by clients who traded foreign exchange and other instruments through the Saxo — which was acquired with the Stonebridge — in 2011, using the funds for its operating accounts and a $9.5m payment required by the market operator ASX to operate its options business.

Mr Vaughan is conducting two weeks of court questioning of directors, employees and auditors of BBY to establish whether there is a case to recover money from directors and their insurers for insolvent trading and other expenses.

Twice on Thursday Ms Yuen fought back tears as she told counsel for KPMG David Pritchard, SC, of a “difficult” and high-pressure job in which she would visit creditors and tell them they would be paid, only to be instructed by Mr Rosewall the following week not to pay them.

“And then they will keep calling me but I can’t pay them and I can’t tell them why,’’ Ms Yuen said.

“The strategy is to delay as much as you can and then whoever complains, you pay them.’’

She agreed with Mr Pritchard that the company could not pay its debts as and when they fall due.

The company attempted to increase the limit of its American Express account because it wanted to pay large creditors with it and use the 55 days of interest-free repayment terms, but some creditors had refused.

Ms Yuen said she had been asked on at least two more occasions to transfer money from a pooled account used by BBY clients trading through foreign exchange platform Saxo to pay for BBY expenses.

This included covering a margin call from the ASX to cover a fall in the share price of Aquila Resources, in which BBY was conducting a major share trade.

Ms Yuen also described a long-running dispute with Saxo over the return of the funds taken from the client account, and said that on her last day with BBY on March 31, 2015, she was asked by Mr Rosewall to pull $1.8m from the Saxo account and another client account used for futures trading, into the general operating account.

Ms Yuen said she resigned from BBY because she was made to feel like a scapegoat and a bad person by Mr Rosewall, who would criticise here in public and take tasks from her and give them to another person without telling her.

“Especially from November onwards for whatever reason I think probably … I am a punching bag.”