Westpac moves to liquidate Forum Finance as $262m fraud alleged

Westpac has moved to liquidate Forum Finance and freeze the assets of executives behind the equipment leasing company after uncovering an alleged $260m fraud.

Westpac has launched legal action against Forum Finance.

Westpac has moved to liquidate Forum Finance and freeze the assets of several executives behind the equipment leasing company after uncovering an alleged $260m fraud.

The bank launched legal action against the Sydney headquartered firm after telling investors on Friday it was subject to “significant potential fraud”.

The Federal Court has ordered that a provisional liquidator be appointed to Forum Finance by the end of this week. It is understood the Westpac board learned of the alleged fraud about two weeks ago, and was informed that fraudulent paperwork and invoices were involved.

The Westpac investigation into Forum Finance comes as Societe Generale also took separate legal action against the finance firm, alleging deceptive conduct with a potential exposure of $9m.

Justice Michael Lee also declared that freezing orders made on June 28 against Forum Finance executives Basille Papadimitriou and Vincenzo Frank Tesoriero be extended until Friday July 9.

Westpac is demanding the two men come forward with $262.9m.

Mr Papadimitriou, who also goes by the name Bill Papas, could not be reached for comment. Mr Papas was until Friday night president of Sydney Olympic Football Club and also owns Greek soccer team Xanthi FC.

A home belonging to Forum Finance director Vincenzo Tesoriero in Sydney’s Rozelle was subject to a surprise asset freezing order last week with a laptop and iPad seized. Meanwhile the company’s Brisbane office was also subject to an order allowing an independent lawyer seize property. No one was home when The Australian visited the Rozelle property over the weekend. Mr Tesoriero could not be reached for comment.

Justice Lee ordered the contents of a Dell XPS laptop and the relevant passwords for the iPad seized at the Rozelle property be searched for “any listed things”.

Westpac has also been given clearance by Justice Lee to file and issue a subpoena to National Australia Bank and Rothsay Accounting to hand over Forum Finance accounts, any company documents, and any documents relating to accounts held in the name of Mr Papas.

Forum Finance, which started in 2011 in Sydney, has expanded to establish offices in Melbourne, Brisbane and Perth.

The alleged scandal has seen several customers of the lease finance business caught up in the matters.

The Australian understands Westpac expects to gauge further material and details on the case, through both internal and external investigations this week. External lawyers and accountants are said to be conducting the probe.

The latest court orders name any funds paid by Westpac in connection with customer agreements with several customers over the period of August 1 2018 to now.

The documents name Veolia Environmental Services, WesTrac, ALH Group, Scentre Shopping Centre Management, Coles Supermarkets, Catholic Healthcare, HWL Ebsworth Lawyers as customers of Forum Finance.

Westpac said it had notified NSW Police, The Australian Securities and Investments Commission and The Australian Prudential Regulatory Authority of the preliminary findings.

“It appears no Westpac customer has suffered a financial loss,” the bank said in a statement.

“Westpac is continuing to investigate how this occurred, including undertaking an external review.”

Forum’s website says it assists customers with the “basics of running their business, like managing their printer and copier fleets”. It has also expanded into business process improvement and automation. Westpac has a commercial relationship with Forum for the equipment the firm was selling and leasing, but is alleging discrepancies arose in the way end customer accounts were managed.