The NSW Supreme Court has 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 that is conducting a liquidators’ examination into the demise of BBY. BBY collapsed in May of 2015 and ended up owing about $61 million to its clients.
KPMG described to the court the firm’s dramatic collapse, which was owned by former tennis great Ken Rosewall and his son, Glenn Rosewall. The downfall of this firm is being described as the largest failure of a stockbroking firm since the recession in 2008 in Australia.
During the tense hearing this past Thursday, April Yeun who was the former strategy manager for the firm stated that Nevine Rottinger, the self-proclaimed psychic and vibrational healer, 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, did she?
Ms. Yuen replied, “Yes”.
She then said that after hearing Nevine’s advice, Glenn would then 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 she was told that based off of Nevine’s predictions, the firm would have “$5 million coming in”.
When speaking of how she was forced to push off creditors who were demanding payment, Ms. Yuen broke down in tears in the witness box.
“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 is alleging that BBY has been in the red moneywise since as far back as 2011 and that they may even have spent clients’ money illegally.
KPMG said in a liquidators’ report that they filed on September 9th that out of 30,000 of BBY’s former clients, roughly about 6,000 of them had potential claims against the firm for a grand total of about $61 million.
KPMG made a statement that BBY clients with missing money are very unlikely to see any of it back before late 2017.
Back on the witness box, Ms. Yuen told the court of how at the firm, she often felt like “a scapegoat” and “a punching bag”.
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 and he will begin giving evidence later this week, and then Nevine will be next in line to sit in witness box.
KPMG believes that there may be grounds for a claim against BBY directors that have to do with losses occurred by 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 all together and has about a week left.