Claims of forgery and a missing $200 million that could hit bank's bottom line by 4%
A soccer heavyweight linked to fraud allegations by Westpac and French bank Societe Generale is thought to be missing.
Basile Papadimitrou, also known as Bill Papas, has not been seen and has not been contactable since mid-June when unexplained transactions with a contract involving Seven Group-owned WesTrac were first brought to light, according to the Australian Financial Review.
Papas and his company Forum Finance face court allegations that they defrauded Westpac more than $200 million.
Papas is also the former president of the Sydney Olympic Football club.
“Contact with Forum Finance and Mr Papas was initially made on 10 June 2021 about what was then thought to be an anomaly with WesTrac’s contracts,” Westpac said in its outline of submissions on a Federal Court suit lodged last week.
“However, Mr Papas did not attend a meeting scheduled with WesTrac on 15 June and has since that time not been contactable or seen.”
According to Westpac, Papas was last thought to be travelling to Perth, however, his whereabouts remain unknown, reported the AFR.
The AFR visited Papas’ Rozelle house, but there was no response at the door. The AFR reported that the blinds were drawn and the double carport was empty.
According to the publication, the potential fraud involved a portfolio of equipment leases with Westpac customers that were arranged by Forum. Suspicions of fraud first surfaced during a routine call between Westpac and WesTrac in which the bank identified an anomaly with a lease finance loan in WesTrac’s name.
WesTrac told the AFR that “it was informed that funds had been accessed from a loan facility in its name with Westpac.”
“WesTrac has no record of having accessed the funds and has advised the bank accordingly,” the spokesman said.
The bank said it then identified around $9 million of equipment contracts between Forum Finance and WesTrac of “doubtful veracity.”
The bank began to investigate six other customers that Forum had allegedly organised finance for through Westpac.
During the second half of June, four of the seven customers told Westpac “either none [or almost one]” of the contract documents provided to them by Westpac appear to be genuine and “the underlying assets allegedly financed do not exist,” reported the AFR.
According to the publication, Westpac said Forum alleged energy and waste management firm Veolia had entered into facilities worth more than $200 million which were financed by the bank.
“Veolia has informed Westpac that it has not sought or obtained that finance, that the documents it has been provided are forgeries and that it has not been making payments to Westpac as required,” the bank’s court documents state.
Veolia is the sole customer thought to be behind $9 million of receivables exposure purchased by Societe Generale, between March and May 2021, said the AFR. The French bank is pursuing a separate fraud claim in the Federal Court against Papas and Forum.
According to the Australian, the bank has moved to liquidate Forum and freeze the assets of several of its executives. The Federal Court has also ordered that a provisional liquidator be appointed to the equipment leasing company by the end of this week.
“Westpac has paid an amount in excess of $254.5 million to Forum Finance in Australia pursuant to equipment contracts with the seven customers: the substantial bulk of which have now been identified by the relevant customer as a forgery,” the bank said.
The AFR reported the results of Westpac’s investigations found 100 different contracts linked to the seven customers and Forum.
The alleged fraud equates to a $300 million pre-tax expense and will wipe an estimated 3 to 4 per cent from Westpac’s 2021 earnings, said the AFR.