Forgery alleged in Forum Finance scandal

Forged signatures, missing goods, and a disappearing Forum Finance chief, who may be in Greece, feature prominently in damning fraud allegations against the leasing group.

French banking group Societe Generale is pursuing Forum Finance in legal action. (Photo by ERIC PIERMONT / AFP)

Forged signatures, missing goods, and a disappearing Forum Finance chief, who may be in Greece, feature prominently in new damning and complex fraud allegations against the leasing group.

Legal documents lodged in the Federal Court by French bank Societe Generale show how it is entangled in the alleged fraudulent activity, given it was part of a financing and leasing arrangement with Forum and end customer Veolia Environmental Services.

Societe Generale is seeking to retrieve its exposure of almost $9m, plus interest.

Westpac has also started its own much bigger legal fight against Forum. It last week told investors it had lodged court action alleging fraud against Forum Finance and its boss Basile Papadimitriou, also known as Bill Papas, relating to an after tax amount of $200m. The gross exposure is about $294m.

An affidavit filed by Veolia finance chief Gurpreet Brar, who has just been appointed to lead the firm’s Indian operations, highlighted a complex web of potential fraud. “The signatures purporting to be mine on the notices of assignment and the attached payment schedules, and certificates of acceptance, are not mine,” he said in the document. “My handwritten name on the notice of assignment dated 8 March 2021 is also not my handwriting.”

The court documents also suggest that executives of Forum believe Mr Papas may be in Greece, after he failed to attend a Perth June 15 meeting he was summoned to explain discrepancies in a Forum client’s accounts. Mr Papas blamed a health emergency for his absence and has not been heard or seen since mid-June.

The court documents reference a June 27 call between Societe Generale and intermediary EQWE’s Luke Price: “Craig (Rollinson) thinks Bill is overseas, perhaps Greece.”

Mr Rollinson – executive manager of Forum’s operations – has been acting in the role of chief executive since Mr Papas’ disappearance.

Mr Papas, Mr Rollinson and Forum did not respond to requests for comment. The Australian foreshadowed last week that it was believed Mr Papas had left Australia.

Mr Papas is a well-known identity in Australian soccer circles and until Friday evening – after the Westpac court action became public – was president of Sydney Olympic Football Club. Last year, he bought Greek soccer team Xanthi FC.

Both Westpac and Societe Generale have separately sought search and asset freezing orders against Forum. The Westpac search orders included five premises, including four Forum offices and Mr Papas’s home in Rozelle, Sydney.

Court orders reveal an iPad and computer were seized from Mr Papas’s home, and the contents will be turned over to the courts later this week. That may shed more light on the alleged fraud, which Westpac says dates back to 2018.

The Societe Generale documents allege Forum and Mr Papas “made representations with knowledge they were false”.

“It’s hard to imagine any plausible defence,” the bank said in an outline of submissions.

The court documents also question the role of intermediary EQWE in the alleged fraud perpetrated by Forum.

A concise statement notes on several occasions Societe Generale received, through EQWE, offers from Forum to sell receivables that were to be paid by Veolia pursuant to the payment schedule.

These receivables – or the funds linked to leasing the equipment – were due to be derived from the use of “waste digester” machines provided to Veolia.

Waste digesters are essentially a bin that converts food waste to liquid, but Societe Generale alleges those in question were never supplied to Veolia and Forum was just seeking the funds.

“The purported receivables that were sold to Societe Generale do not exist,” the documents allege.

An affidavit by Societe Generale’s head of corporate coverage Gregory Thong questioned how the fraud was able to take place.

“At no time did anyone from EQWE or Forum Finance inform SG that such an amount was not being sought by Forum Finance to be paid, or that there was some mistake in the payment being made,” he said.

His affidavit alleged there were at least six months of transactions that were affected by the potential fraud.

Societe Generale spokeswoman declined to comment further.

EQWE has been left scrambling after its exposure to the alleged Forum fraud was exposed. The financial company engaged McArdle Legal late last week.

McArdle Legal principal Chris McArdle said EQWE had no way of knowing, under the arrangement between Forum and Veolia, what payments had been made.

“The due diligence and other dealings involved in any sort of loan financing was up to the parties to the loan contract and EQWE was not party to the loan contract,” he said. “EQWE acted 100 per cent at all times without deviation in accordance with its contract as an agent the agency agreement called on it to introduce proposals to a lender.”

Mr McArdle said EQWE had gone to the police before Westpac, reporting the matter to North Sydney police station on June 24.

However, Westpac disclosed the potential fraud on Friday after executing the searches on the five Forum-related premises and Mr Papas’s home.

The bank noted at the time it had also reported the matter to NSW Police, the corporate regulator and Australian Prudential Regulation Authority.

A NSW Police spokeswoman on Tuesday said inquiries into the matter were continuing, although admitted a formal investigation was yet to begin.

“Earlier this month, police received an initial report of an alleged multimillion-dollar fraud against a financial organisation,” she said. “An investigation is yet to commence.”

Westpac’s legal case documents show it started conducting a reconciliation of its customer accounts and its relationship with Forum, after WesTrac requested more information from the bank to boost its leasing facility. WesTrac, one of Australia’s largest suppliers of heavy machinery, contacted Westpac in late May.

Westpac has also moved to liquidate Forum as well as executing freezing orders for assets of the company and Mr Papas.

On Friday, the Federal Court ordered a provisional liquidator be appointed to Forum by July 8. A hearing is scheduled for July 9.