The NSW Supreme Court heard about how the chairman of the failed stockbroking firm BBY in Sydney had taken advice from a supposed psychic when planning cash flow forecasts and budget estimates. KMPG is an accounting firm conducting a liquidators’ examination into the demise of BBY.
BBY collapsed in May of 2015, owing about $61 million to its clients. KPMG described the firm’s dramatic collapse to the court, owned by former tennis great Ken Rosewall and his son, Glenn Rosewall. The firm’s downfall is Australia’s biggest stockbroking firm failure since the recession in 2008. April Yeun is the former strategy manager for the firm.
During the tense hearing this past Thursday, she spoke about a self-proclaimed psychic and vibrational healer named Nevine Rottinger. She said Rottinger advised company executive chairman Glenn Rosewall on money matters. An employee for KPMG named David Pritchard asked Yuen, “Nevine put her own estimates in the budget, didn’t she?”
Ms. Yuen replied, “Yes.” After hearing Nevine’s advice, Yuen said that Glenn Rosewall would decide which of her estimates were “reasonable.” “That was basically similar with the cash forecast as well,” added Ms. Yuen. For example, at one point, Yuen was told that based on Nevine’s predictions, the firm would have “$5 million coming in”.
BBY Made Employees Evade Creditors At All Costs
When discussing how higher-ups forced her to push off creditors demanding payment, Yuen broke down in tears. “The strategy was to delay as much as you can,” she said. “There [was]… this constant game that [was] being played,” she added. She told of how “the clients who complained first got paid.” KMPG alleges BBY has been in the red money-wise since as far back as 2011.
They also believe they may even have spent clients’ money illegally. KPMG filed a liquidators’ report on September 9th. It stated that out of 30,000 of BBY’s former clients, roughly about 6,000 of them had potential claims against the firm for a total of about $61 million. KPMG stated that BBY clients with missing money likely wouldn’t see it back before late 2017.
Yuen told the court how she often felt like “a scapegoat” and “a punching bag” at the firm. When asked why she decided to leave the firm, she replied, “If there [was] anything wrong, even if I didn’t do it, I would get the blame for it.” Arun Maharaj is the former BBY chief executive. He’ll begin giving evidence later this week, then Nevine will sit in the witness box next.
KPMG believes there may be grounds for a claim against BBY directors related to losses from moneyless trading. They also stated that BBY “did not maintain adequate financial and client records” and that they had “identified transactions outside of the ordinary course of business that may have led to the depletion of client monies.” This public examination into BBY is expected to last about two weeks and has about a week left.