Radhika Oswal thought ANZ had ‘gone nuts’, court told

When ANZ Bank asked Radhika Oswal for a $1 billion personal guarantee, she thought they’d “gone nuts”.

Pankaj and Radhika Oswal leaving the Victorain Supreme Court in Melbourne yesterday

When ANZ asked Radhika Oswal for a $1 billion personal guarantee, she thought they had “gone nuts”.

From the witness stand of the Victorian Supreme Court yesterday, she was recounting the stressful days in December 2009 when ANZ allegedly discovered crucial security documents underpinning the Oswal family’s business empire were fraudulent.

For 2½ months, the court has been hearing allegations fly back and forth in the case, in which Pankaj and Radhika Oswal claim at least $1.5bn from ANZ, while the bank accuses them of misappropriating $150 million from their Burrup Fertiliser business for use on cars, property and Mrs Oswal’s Otarian vegetarian restaurant chain.

But yesterday was the first time judge Julie Dodds-Streeton, recalled to the bench especially for the epic litigation, has had the benefit of hearing directly from one of the Oswals.

While Mr Oswal has typically attended court in a smart casual uniform of slacks and blue jacket, his wife yesterday cut an impressive figure in an orange dress, cut above the knee, silver stilettos and a faux-fur jacket given she is a committed vegetarian.

She was due to give evidence in the morning, but last-minute settlement talks, which ended with the parties still far apart, delayed her entrance to the witness stand to just before 2.30pm.

Under questioning from her counsel, Garry Rich, SC, Mrs Oswal emerged as a woman with little formal education but big ambitions, which were regularly thwarted by the expectations of her rich but strict Hindu family.

She said she had nothing to do with the set-up and operation of the Burrup Fertiliser business in the early 2000s — that was the role of the man she married at just 18 years old, Pankaj.

However, she said her stake in Burrup was “stridhan”, property accumulated during marriage that under Indian law cannot be taken away from women.

When she married Pankaj “he told me that anything that he earns in his life through his own efforts will belong 100 per cent to me and I would be the beneficiary and decider of how to apportion that wealth,” she told the court.

By December 2009, she considered her most valuable asset her shares in Burrup, which she told the court were worth “over $1bn” at the time.

ANZ summoned Pankaj Oswal to its Melbourne headquarters for an urgent meeting on December 9.

“He called me in the evening after his meetings, from Melbourne,” Mrs Oswal said.

“He sounded very anxious and he said to me that, ‘Radhika, they know everything’.”

She said that the following day her husband explained to her the European security guarantees “were in fact forged” by former employees — and he had known about it and was worried about being criminally prosecuted.

The court heard ANZ, which had loaned the Oswals and Burrup hundreds of millions of dollars in a series of loans, demanded a mortgage over the couple’s shares and personal guarantees from both of them.

“I found it ridiculous that I was being dragged into any of this and I didn’t understand why I was being made party to this,” Mrs Oswal said. “I mean, I understand it involved my husband, but that doesn’t make me liable for his problems.”

She said the demand she sign a personal guarantee of $US928m ($1.2bn) was “completely unjustified and I thought they had gone nuts or something and I wasn’t going to be party to this”.

And she was “very shocked and of course insulted” that her husband gave ANZ her share certificates as security.

“They had all just bypassed me and asked for my share certificates as if I didn’t exist,” she said.

She said “Radhika Oswal” signatures on two documents, a $132m guarantee to DVB bank in 2009 and minutes of a shareholders meeting of British Virgin Islands company Maruti Investments in September 2006, were not hers.

Mrs Oswal also told the court about her wealthy background — “I was very blessed” — as the daughter of a wealthy industrialist. But the flip side of her privileged upbringing was a limited formal education: boarding school in the Himalayas, a diploma in gemology and finishing school in Switzerland, where she said subjects included wine tasting, make-up and events organising, important “if you were the daughter of, or married to, an ­important man, as you would be expected to if you went to that school”.

Her evidence continues today.