Forum Finance director Vincenzo Tesoriero agrees to notify Westpac of any departure from Australia

Forum Finance director Vincenzo Tesoriero has agreed to give Westpac notice if he plans to leave the country, as the bank pursues him over fraud allegations.

Westpac is one of three banks suing Forum Finance, Bill Papas and related entities. Picture: NCA NewsWire / Christian Gilles

Forum Finance director Vincenzo Tesoriero has agreed to give Westpac notice if he intends to leave Australia and will disclose his assets to the Federal Court, as the bank pursues the company and its directors over fraud allegations.

In an impromptu court hearing on Tuesday afternoon, Westpac was seeking to have Mr Tesoriero hand in his passport and have Judge Michael Lee find him in contempt of court. That was because Mr Tesoriero had not filed an affidavit of his assets by an already ascribed court deadline.

Mr Tesoriero’s barrister agreed, though, that the affidavit would be filed by Wednesday morning and said his client would give 24 hours notice to Westpac if he intended to leave the country.

Equipment leasing group Forum Finance and its boss Bill Papas and director Mr Tesoriero are being sued in the Federal Court over alleged fraud. Total - but separate claims - by Westpac and two other banks across Australia and New Zealand amount to $400m, and the cases include allegations of fraudulent invoices, forged signatures and missing goods.

The Australian can reveal while Westpac, Societe Generale and SMBC Leasing and Finance, have notable Forum exposures, Macquarie Group is understood to have a very small exposure to the firm.

National Australia Bank is Forum‘s transaction bank and also has potential exposure through mortgages on Mr Papas’s property portfolio.

Justice Lee adjourned the matter till Thursday but noted the order relating to Mr Tesoriero.

“Upon the undertaking of the third respondent Vincenzo Frank Tesoriero by his senior counsel that he will not depart the Commonwealth of Australia without giving … Westpac Banking Corporation 24 hours notice of his intention to do so,” the judge said.

Senior counsel Greg McNally, acting for Mr Tesoriero, said he had not filed an affidavit of his assets yet, given “quite a number of trusts in which Mr Tesoriero is a beneficiary”.

“It is necessary to obtain various trustees and ascertain as to whether he is a discretionary or non discretionary beneficiary,” Mr McNally added.

“It (the affidavit) should be sworn in the immediate future.”

Mr Papas, whose full name is Basile Papadimitriou, is in Greece and his barrister last week told the court he would find it difficult to return to Australia given he tested positive to Covid-19 on July 8. Mr Papas has not been in Australia for several weeks, after he failed to attend a Perth meeting relating to discrepancy in a customer’s account in mid-June.

The judge last week ordered Mr Papas outline his plan to return to Australia and an affidavit of his assets by Monday evening. A document has been lodged, although its contents have not yet been made available by the court.

Mr Papas was president of Sydney Olympic Football Club until July 2 when the Westpac legal case became public and last year bought Greek soccer team Xanthi FC.

Separately, administrators of a long list of Forum Group-related entities have received 245 creditor claims, with the sheer claims volume and interest in the process spurring an adjournment of the first creditors’ meeting.

The online meeting was scheduled for Tuesday morning, but administrator Mackay Goodwin said attendance greatly exceeded expectations as about 180 creditors were seeking to get through a registration process.

Mackay Goodwin chief Domenic Calabretta said a 24-hour adjournment would allow that process to be expedited and may lead to a sale of two entities caught in the administration.

The legal action has led to several Forum entities being tipped into liquidation, while other entities were placed in administration.

“The registration is going to take a long time and I just don’t want to waste people’s time,” Mr Calabretta said on Tuesday of the meeting’s adjournment.

“Last night we received quite a lot of proof of debts at around 9pm at night, I still need to go through each claim and the documentation received behind each claim and determine what quantum I will be allowing.”

He said 245 creditor claims - across the group of entities within the administration - were received and that Mackay Goodwin was also hopeful of securing a sale of two Forum-related entities soon.

“We are in the process of completing a potential sale of businesses and it does allow us to complete that sale and then for me to report back to creditors,” Mr Calabretta added.

A string of entities including Forum Group, Forum Direct, Iugis, Orca Enviro Solutions and several property entities linked to Mr Papas, are included in the administration process.

Forum Finance’s Bill Papas.

The Australian Securities and Investments Commission was present at the creditors’ meeting as an observer.

Forum’s auditors Rothsay reported the company to ASIC on June 30 after the extent of the alleged fraud was revealed.

Members of the McGrathNicol insolvency team overseeing the Forum Finance attended the creditors’ meeting on Monday. McGrathNicol is managing the liquidation of Forum Finance and several related entities.

The Australian on Monday revealed Westpac’s executives will within the next four weeks meet with the Australian Prudential Regulation Authority to provide a comprehensive stocktake on how the bank became a victim of the alleged fraud. It will also provide information on how it intends to respond to and fix any system weaknesses.

Mackay Goodwin has previously said it is reviewing the viability of ongoing operations for Forum Group Managed IT Services and Autonomous Energy, a solar panel business.

A decision is pending on whether the administrator can continue the operation of those business units, which employ about 170 staff.

Ahead of the adjournment of the creditors’ meeting Iugis employees, who were notified the food waste business was being closed on July 12, questioned the delay in placing the company into liquidation. That impacts the timing of them having access to a government scheme for their entitlements.

Once Iugis is placed into liquidation employees will receive some payment for benefits through the Fair Entitlements Guarantee scheme.

Mr Calabretta said the delay was due to statutory timelines required for the liquidation process.

“Iugis will be wound up,” he added. “I just can’t see it not going into liquidation.

“We’ll be working with all employees to quantify those claims and try get paid as quickly as possible.”

Iugis employees had reported they were not paid on July 12.

However, Mr Calabretta said suggestions “we hold cash at the bank to pay those wages” were wrong.

“All assets have been frozen subject to freezing orders and in accordance with secured creditor positions,” he said.

Mr Tesoriero is believed to have attended the meeting under the name “Vince Tes”.

Company accounts show Mr Tesoriero had resigned from some Forum group entities some time ago, but ASIC records show he had not resigned from Forum Finance entities.

Westpac has targeted Mr Tesoriero, seeking to freeze his assets alongside those of Mr Papas.