Freeze remains on One.Tel founders' assets

By CNN's Geoff Hiscock
Asia business editor

SYDNEY, Australia (CNN) -- Australia's corporate regulator has agreed to the lifting of travel bans on Jodee Rich and Bradley Keeling, the high-profile founders of failed telco, One.Tel.

But the Australian Securities and Investments Commission successfully argued in the New South Wales Supreme Court Friday that a freeze on their assets should remain.

A spokeswoman for ASIC told CNN the freeze would extend to February 11 next year.

One.Tel collapsed in late May this year with debts of at least $300 million.

The asset freeze, originally agreed to in June and extended in September, covers Rich, Keeling, former finance director Mark Silbermann and Rich's wife Maxine.

On Wednesday, ASIC began civil action against Rich, Keeling, Silbermann and former One.Tel chairman John Greaves.

ASIC alleges that Rich, Keeling and Silberman breached their duties as company officers because they had information or access to information regarding the financial condition of One.Tel that was withheld from the board and the market.

It alleges that Greaves breached his duty to exercise care and diligence as company chairman.

Allegations rejected

Rich and Keeling have criticized ASIC's investigation of One.Tel and have said they will defend the action. Rich told a press conference Wednesday the allegations were "without foundation". Greaves also has rejected the ASIC allegations.

ASIC said on Wednesday it was also seeking compensation of between $15.6 million (Aust. $30 million) and $26 million (Aust. $50 million) from the defendants for loss of value in One.Tel.

It says One.Tel was allowed to trade from March 30 to May 29 because of what it alleges is the failure of the defendants to properly discharge their responsibilities.

At one stage in its short but spectacular life, One.Tel was the fourth largest phone service provider in Australia by subscriber numbers. Its directors included James Packer and Lachlan Murdoch, the sons of media tycoons Kerry Packer and Rupert Murdoch.

The telco's demise angered and embarrassed James Packer and Lachlan Murdoch, who said they had been "profoundly misled" about the true state of the company's finances.

PBL, News held 41%

Their two companies, Publishing & Broadcasting Ltd (PBL) and News Ltd, between them invested about $460 million in One.Tel's development and held a stake of 41 percent.

ASIC said that evidence available to it indicates that One.Tel's true financial position was not known to Packer, Murdoch and three other directors until shortly before an administrator was appointed on May 29.

Rich and Keeling were removed as co-chief executive officers and board members on May 17, when News and PBL moved to take control of the company.