Forum Finance customers look to sever ties with Bill Papas cousin’s Our Kloud

Customers and other firms entangled in the Forum collapse want to sever ties with an entity run by founder Bill Papas’s cousin that took over lease contracts.

The cousins of Forum Finance founder Bill Papas are being drawn into Federal Court proceedings related to alleged fraud.

Customers and other firms entangled in the collapse of Forum Finance are seeking to sever ties with an entity run by founder Bill Papas’s cousin that took over equipment lease contracts.

The Australian has spoken to customers of Our Kloud, run by Eric Constantinidis, that had their accounts direct debited by the new firm, are unhappy with what has occurred and are looking to move to other providers.

Our Kloud acquired some of the equipment leases from the initial Forum administrator in July and contacted customers to confirm their direct debit details.

The revelations are the latest controversy in the Forum saga, as Westpac and two global banks separately pursue Forum and Mr Papas in the Federal Court over allegations of fraud amounting to $400m. The now liquidator of a long list of Forum equities has begun selling assets as it seeks to retrieve funds for creditors.

McGrathNicol is seeking to sell a spate of properties, a luxury yacht, waste-digester machines and other assets linked to the entities and directors of Forum Group Financial Services Bill Papas and Vincenzo Tesoriero.

On the issue of the equipment leases, former Forum customer Guy Bailey said Our Kloud had taken three payments from his business account, prompting him to request his bank put a stop on the withdrawals.

Mr Bailey runs Bailey Marine Group which leased three printers from Forum but does not want to stay with Our Kloud.

Another former Forum customer, who declined to be named, also contacted their bank to put a stop on payments to Our Kloud, while they negotiated other arrangements to lease the equipment via other providers and underwriters.

Mr Constantinidis did not respond to calls and emails seeking comment.

The Australian is not suggesting any of the direct debits were unlawful or otherwise inappropriate.

Westpac, Societe Generale and Sumitomo Mitsui Banking Corporation are separately pursuing Forum and Mr Papas over allegations of false leases and forged contracts, leading the banks to finance leases where the goods often didn’t exist.

As well as end customers, others are also severing their commercial relationships with Our Kloud, which also held Forum’s data on its servers.

Supply chain financiers Octet have ended their relationship with Forum following the sale of some leases to Our Kloud.

Octet made a $1.2m claim as part of Forum’s administration and liquidation process.

Forum had used Octet to buy photocopiers from Konica Minolta to supply to customers.

Octet managing director Clive Isenberg said the company had no dealings with Our Kloud “nor with Konica post the sale”.

Mr Isenberg said he was “shocked” when details of the alleged fraud were aired in Federal Court documents, beginning in July.

Court examinations have previously heard allegations that contracts featuring fake Konica serial numbers had featured in the claimed fraud at Forum.

Konica had joined the Octet supply chain platform in late 2018 as a supplier to their new client Forum, but Konica are not linked on the platform to any other clients.

In August, Konica said it had stopped accepting orders for goods and services from Forum and had no commercial involvement with Our Kloud.

The Westpac-led investigation into the alleged Forum fraud is heating up, via the court, and has also embroiled a corporate entity linked to Our Kloud’s Eric Constantinidis and his brother and mortgage broker Bill Constantinidis.

Court documents show subpoenas were issued for two companies: Fort Matilda and Natave.

Natave is owned by Bill Constantinidis, chief executive and founder of financial services company Lending Association.

The new company Natave was registered on June 30 this year and is now being struck off after papers were filed on September 6.

Mr Constantinidis said the company had been set up as part of a commercial arrangement with Mr Papas but declined to reveal the nature of the deal.

He said he had commenced action to strike off the business after concerns were raised, but wouldn’t comment further.

Fort Matilda is a Melbourne-based loan brokerage and investment company that deals with property related transactions.

A company representative said that business had dealt with Mr Papas and Mr Tesoriero in the past but had not had any association with the men since late 2019.

The legal action in the Federal Court against Forum has also delved into how the alleged fraud was perpetrated and the principal and agency relationship with commercial facilitation firm EQWE is under the microscope.

As a result of the Forum scandal Westpac has now moved to shut down its principal and agency leasing financing business.

Westpac has alleged a $300m exposure to fraudulent contracts linked to Forum.

The Octet platform requires validation of lease arrangements, meaning there is a process to verify the contract and the existence of goods involved. However, there is uncertainty surrounding the steps EQWE took to validate leases it arranged for Forum and Westpac.

It’s unknown if EQWE has a business relationship with Forum or Our Kloud.

EQWE – which declined to answer questions put to the firm by The Australian – assisted in brokering deals for Forum.

Court documents have shown how Forum kept internal lists of leased contracts, with many noted as “future funding”, which are alleged to be fraudulent contracts for which no legitimate lease transaction was made.

These include contracts for Veolia, LH Group, Remondis Australia, Findex, Catholic Healthcare, Coles Supermarkets Australia, Perfection Fresh Australia, URM Environmental Services, WesTrac, and the Australian Institute of Personal Trainers.

EQWE legal representative Chris McArdle said the company wouldn’t be responding to questions. “Our clients are guilty of nothing, including negligence,” he said. EQWE director Luke Price, who dealt with Forum, reported Mr Papas and the alleged fraud to NSW Police on June 25.