Oswals tell of ANZ’s ‘unconscionable’ conduct

A court has heard ANZ acted in “disregard or disdain’’ as it ramped up its chase of Radhika Oswal.

Mr Rich said a feature of the bank’s conduct was its disdain for Mrs Oswal’s independence and personal rights. Picture: Hamish Blair

ANZ Bank placed “illegimiate pressure” and engaged in conduct that was “unconscionable’’ as it pursued Indian businessman Pankaj Oswal’s wife Radhika, a court has heard.

It ultimately led to her financial position radically changing over a frantic 12-day period, with Mrs Oswal having no debt to being personally responsible for $US568 million in debt to ANZ, the court heard, while the bank also acted in a “disregard or disdain’’ for Mrs Oswal as it ramped up the pressure on her.

Mrs Oswal’s barrister, Garry Rich SC, delivered his opening remarks in the Supreme Court in Melbourne this afternoon, as he told the court how he would paint a picture of ANZ ruthlessly chasing Mrs Oswal — using her position as Mr Oswals’ wife as leverage — that ultimately led to her forfeiting he biggest asset, her stake in Australian fertiliser business Burrup Holdings.

“We submit that the evidence will show the answer to these questions is that the bank, in its dealings with Radhika in December 2009, imposed illegitimate pressure and engaged in conduct that was unconscionable,’’ Mr Rich told the Honorable Justice Julie Dodds-Streeton.

Mr Rich told the court in his opening remarks that ANZ went after Mrs Oswal to provide guarantees over her husband’s debt after discovering it had lent hundreds of millions of dollars with an inadequate or non-existent security.

The case has seen ANZ dragged into a fight with the former Perth power couple, Mr and Mrs Oswal, with the Indian businessman now targeting the bank for $2.5 billion damages. Their fertiliser business, Burrup, eventually collapsed and ANZ called in the receivers in 2010. The Oswals have claimed their share of the company was undersold.

Receivers, appointed by ANZ subsequently sold the Oswal’s 65 per cent share of the company for $US560 million, but the couple claim the stake was undersold and was actually worth close to $1.4 billion.

In court today Mr Rich said that in the lead-up to the collapse of the Burrup business, ANZ engaged in unconscionable conduct as it applied pressure on Mrs Oswal to sign various documents that had the effect of making her responsible for more than half a billion dollars in debt.

“That a bank would deliberately and consciously apply pressure to a surety or proposed surety who was not in default of any contractual obligation she owed to the bank, in order to induce her to sign a personal guarantee and share mortgage is of itself, we submit, unconscionable,’’ Mr Rich told the court.

“Pressure from a bank ought to play no part in a surety transaction. Where it’s applied deliberately and consciously in order to obtain securities and financial benefits for the bank at the surety’s expense, we submit the resultant transaction is of dubious validity and the court shouldn’t hesitate to set it aside.”

Mr Rich said a feature of the bank’s conduct was its disdain for Mrs Oswal’s independence and personal rights.

“The second element or feature of the bank’s conduct that we wish to highlight is best described as a disregard or disdain for Radhika’s separate personality and interests.

“Your Honour will see as we go through the documents in the opening bundle numerous instances on which the bank disregards or disdains the fact that Radhika was a person with rights of her own.

“They disdain the fact she’s an individual who could say, “No”.

“The bank proceeded on the basis that Radhika, as a wife, ought to sacrifice her own property if her husband was in trouble.”

The ANZ also used her relationship with her husband against her.

“Why did they approach her? Because she was Pankaj’s wife and as such the bank presumed that Radhika would acquiesce in whatever needed to be done to help her husband.’’

The case continues tomorrow.