Evan Jones
The National Australia Bank is an iconic Australian corporate. Only
recently it announced a
record profit
for a bank. Its shares change hands at $32 plus.
For a Melbourne-based bank it is surprisingly big in Queensland. The
NAB took over the State-based Queensland National Bank after World War
II and overnight acquired a large portfolio of small business and
farming borrowers. The NAB has also been a significant player in
Queensland’s post-war resources development – the NAB was Utah’s
banker for example. Don Argus himself achieved a meteoric rise from a
background as branch manager at Gladstone in Queensland.
But the NAB does not have an unblemished reputation in Queensland.
Many locals refer to it as the Nab and Grab. And it didn’t help its
reputation by putting the cleaners through its rural borrowers several
years ago. (The bank actually decided to dramatically rationalise its
loan book after 9/11 because of an expected global downturn –
evidently its key strategists were on some kind of illegal substance.)
So it is that sleepy Maryborough has been the location of a rather
interesting vignette regarding the NAB and a Queensland borrower. And
this story is of more than parochial interest. To quote verbatim from
the Fraser Coast Chronicle.
NAB accused of dirty tricks in fall of bricks
Thursday 24 November.
Australia’s biggest bank has been accused of colluding
with one of Australia’s biggest companies to destroy a Wide Bay
business. Member for Maryborough Chris Foley alleged in the state
parliament this week [on Tuesday] that the National Australia Bank
colluded with Boral Ltd to wreck the Bundaberg-based Wide Bay Bricks
belong to Sante and Rita Troiani.
He alleged that the bank had engaged in “treachery, deceit,
unconscionable bank and business practices” and “unscrupulous
manipulation of the legal and justice process aimed deliberately at
deceiving the courts and destroying the Troianis”. The Troianis
founded Wide Bay Bricks in 1974-75 and grew it over the next 20 years
to exporter stage and employing almost 150 people.
“By the early 1990s, Wide Bay Bricks had become a serious thorn in the
side of their bigger competitors in the industry and that was when
their troubles began with the National Australia Bank,” Mr Foley said.
“ December 1998, less than a year before the NAB tipped the Troiani
company into receivership, the Troianis’ business and personal assets
were estimated independently at almost $100 million.
“Today, the Troianis exist on a pension. Mr Troiani supplements this
by growing and selling flowers from a leased block of land. Mrs
Troiani rises before five o’clock each morning when work is able
packing fruit for Bundaberg district growers.”
Mr Foley said as the company grew it received unwelcome takeover
overtures from its biggest competitor, Boral. “In 1983, the NAB began
actively pursuing their Wide Bay Bricks banking business. “After
promises of unlimited funds and assurances of no involvement with
Boral and a national award fro the Troiani company initiated by the
NAB, Wide Bay Bricks’ banking business transferred to the NAB in
November 1983,” Mr Foley said.
“Later, after financial problems and demands from the NAB began
emerging, the Troianis discovered, much to their dismay, that the NAB
and Boral had common directors and that the NAB was Boral’s chief
financier and banker.
“What followed can only be described as a movie script litany of
alleged dubious dealings and actions as chronicled in the submission
by the Troianis, which I table today, and accompanying reports by a
senior banking expert and investigator Mr John Salmon. These allege an
orchestrated strategy to tighten company liquidity and to strip the
Troianis of all private assets by a series of sales under pressure
from the NAB to cover artificially generated financial shortfalls in
the company, including among other things the operation of shadow
ledgers and secret accounts.”
The company eventually went into receivership, was broken up and sold
off at a fraction of its earlier value. “Finally, the NAB pursued and
won judgments for debt and bankruptcy which has left the Troianis
without the financial or professional resources to challenge or
redress their position.
“Mr Salmon, with more than 40 years’ banking experience with the NAB,
asserts that the Troianis have been the victims of ‘a deliberate sting
by the operation of the National Australia Bank’. He contents that
this was put into play by senior administrative employees of the NAB
and that this ‘sting policy’ continued after the acquisition of the
company’s banking business and ‘proceeded on a clandestine path to
ensure the demise of the company as per its present status’.
“Mr Salmon also further alleges that there is a culture of concealment
by the NAB to achieve a nefarious outcome – in this case the break up,
sale and demise of Wide Bay Bricks and the bankrupting of the Troianis.
Such claims of banking malpractice and abuse of our legal processes
and courts through allegedly corrupt practices, unchecked by the
courts, cannot simply be swept under the carpet,” Mr Foley said. The
issue raised serious questions that warranted an in-depth and
unrestricted investigation.
A spokesman for the NAB said yesterday the bank “vigorously disputed
the portrayal given” by Mr Foley and would be providing a detailed
response to the allegations.
Foley claims discredited in court, says the NAB
Friday 25 November
Claims against the National Australia Bank by Wide Bay Bricks were
settled in the courts five years ago, a spokesman for the bank said
yesterday. The bank was answering allegations in the state parliament
this week by Member for Maryborough Chris Foley that it had colluded
with building materials supplier Boral Ltd to financially destroy Wide
Bay Bricks.
“All those allegations that the Member has made have been before
various courts, state courts of appeal, etc, and have all been thrown
out of the court,” the spokesman said. It is interesting that the
Member chose to make those (allegations) under the privilege of
parliament. It was finalised about five years ago.”
He reiterated that the NAB denied the allegations “vigorously”. “We
tried to support the brick-works quite substantially. In fact we had
to write off several million dollars in losses on this one because
tried to support it several times.”
As for the claim by Mr Foley that the bank colluded with Boral because
they shared common directors, “the courts said there was nothing to
it”. He said the bank was not looking at ways to take the issue up
with Mr Foley who, he said, had not contacted the bank to verify the
claims.
Mr Foley, who was at parliament house yesterday, said he stood by his
comments “absolutely. I don’t propose to make any other comment about
it,” he said.
Anyone who wanted to see what happened could look at the documents
that he had tabled in the house. “Then they can make up their own
minds.”
WBB victim denies matter thrown out
Monday 28 November
The man at the centre of allegations aired in the Queensland
parliament that the National Australia Bank deliberately destroyed his
business has disputed the bank’s response. Sante Troiani said in a
statement that it was untrue for the bank to claim that the matter had
been before the courts “and had been thrown out”.
Bundaberg-based Mr Troiani was the owner of Wide Bay Bricks which was
placed in receivership by the NAB in 1998. Member for Maryborough
Chris Foley alleged in parliament on November 22 that the NAB colluded
with building materials supplier Boral Ltd to send the company broke.
The allegation has been vigorously denied by the NAB which said the
claims had been aired in court which found “there was nothing to it”.
This is disputed by Mr Troiani.
“The truth is, because of the manipulative court tactics of the NAB,
these allegations have never been considered, let along tested, by any
court although we have tried to have them considered,” he said in a
written statement. And there has never been any determination on them,
as the bank now suggests, by any court at any level.
“And far from being over, for us, bankruptcy processes initiated by
the NAB are still in the courts.” Mr Troiani said anyone interested in
the truth should access the documentation table in the parliament by
Mr Foley.
* * *
The plot thickens. [See also
Document discovery and the Australian courts, July 14.] We haven’t
heard the end of this one.
