Tennis great Ken Rosewall fronts court on BBY

Tennis great Ken Rosewall has told court his son’s now-collapsed brokerage was “let down by the staff”.

Glenn Rosewall and father Ken at broker BBY.

Tennis legend Ken Rosewall said his son Glenn put his “heart and soul’’ into the stockbroking business BBY and was let down by his staff.

But when taking to the witness stand on Wednesday in an inquiry into the collapse of BBY last May, Mr Rosewall admitted to having concerns about the broking firm in 2011 when it needed money to buy Stonebridge Securities and fund an expansion of its options trading business.

Mr Rosewall said that while his son Glenn, who owned the business from 2004 and was its executive chairman, tried his best the business may have got too big and complex for its executives to handle.

“I think he put his heart and soul into the business,’’ Mr Rosewall, a director of the business from 2008, told the Supreme Court of NSW.

“I think he tried his best all the time in reference to the overall business of BBY.

“He had ambitions to make it big and they were going good until 2008 and I think under the circumstances and since then it might have got too big.

“I don’t understand it all but it was a very complex organisation with so many businesses and it was just too hard for two or three executives to handle.”

Mr Rosewall is considered one of the great tennis players, wining eight singles Grand Slam titles between the 1950s and the 1970s – including a ten-year stretch where his pro status barred him from contesting such titles - and helping Australia to three Davis Cup titles. The tennis arena at Homebush in Sydney’s west - where the most recent Davis Cup tie was played - is named in his honour.

Mr Rosewall is being queried over his role as a director and investor in BBY from 2008 and his concerns about the business, revealed in email exchanges obtained by the liquidator.

“It was thought I would be helpful in terms of public relations and promotions and introducing myself to the staff in the offices around Australia,’’ Mr Rosewall said.

He agreed he did not have any direct experience of stockbroking and did not have a detailed understanding of BBY’s business and some of the transactions that it undertook.

His business experience was restricted to collecting the rent on a shopping centre he was an investor in, and for warehouses in Sydney that his family owned.

The NSW Supreme Court has heard Mr Rosewall invested millions of dollars in the firm – all at Glenn’s request – including $3m of shares in 2011 and two further loans.

“I felt (I had) very much a good father-son relationship with him and that’s why I put money into the firm and I think he was let down by the staff,’’ Mr Rosewall told the court.

Mr Rosewall said a $2 million loan he made to the firm was struck at an interest rate of 15 per cent but after one payment of $300,000 he asked for the rate to be halved because he thought he was being paid too much.

He told the NSW Supreme Court that by 2013 he had “reached the end of the road’’ in putting more money into the firm and had concerns about the financial performance of the company.

But the court heard that BBY needed $3m in mid 2013 and as well as loaning $500,000 to BBY he advanced $3m to his son, who then provided $2.5 million as a loan to the firm.

“I don’t know if Glenn had other debts or was being pressured by the banks… so I agreed to help him out,’’ Mr Rosewall said.

David Pritchard, SC, for the liquidator Stephen Vaughan of KPMG, asked if by middle of 2013 he had “had enough” of putting money into the frm and decided only to provide it to his son.

“I am not sure I said it in so many words,’’ Mr Rosewall said.

Mr Pritchard asked if his reluctance to fund the firm directly was because of concerns about its operations.

“I think that is the case, yes,’’ Mr Rosewall said.

BBY collapsed in May 2015 and Mr Vaughan has estimated the firm faces a $23m shortfall of assets to pay creditors. He has alleged the company may have been insolvent from 2011 onwards and is grilling executives and directors to establish a potential legal claim against their insurance policy.

Mr Rosewall said he was aware that BBY had had difficulty paying debts and that there were companies that owed BBY money and had not paid.

From conversations with his son and chief executive Arun Maharaj he understood that BBY needed some extra money.

“All in all they were very worried and it affected the staff relationships and made it very difficult.

Mr Pritchard asked if from August 2013 on he had taken any steps to ensure the company was not trading while insolvent.

Mr Rosewall replied: No, not personally.

The hearing continues.