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Bendigo Bank subsidiary Rural Bank and three of its senior executives have been accused of complicity in an elaborate fraud

Bendigo Bank subsidiary Rural Bank and three of its senior executives have been accused of complicity in an elaborate fraud
Bendigo Bank subsidiary Rural Bank and three of its senior executives have denied accusations they were complicit in an elaborate fraud allegedly used to steal a database worth as much as $100 million.

The allegations against Rural Bank, its chief executive Paul Hutchinson, general manager of marketing John Marshall and head of channel marketing Jason O'Sullivan received their first airing on Friday at a NSW Supreme Court directions hearing.

They are named as defendants in a lawsuit brought by the owner of the database, Kisimul Holdings, against a former employee, Tom Simms, who also denies the allegations.

Kisimul Holdings, which trades as KG2, alleges that Rural Bank and its executives assisted Mr Simms in his ''dishonest and fraudulent'' plan to spirit away the database.

 KG2 also alleges that in June last year, Mr Marshall cut a side deal with Mr Simms ''whereby Mr Simms would pay monies into Mr Marshall's personal New Zealand bank account in exchange for certain assistance/services by Mr Marshall''.

The lawsuit comes as the Bendigo Bank moves to expand its share of the farming finance market by buying the Victorian State Government's Rural Finance Corporation, including its $1.7 billion agribusiness loan book, in a controversial deal that did not go to tender.

Bendigo has yet to file a defence and denies its executives have done anything wrong, but it has agreed it is liable if any of the claims against them are upheld.

''The claims are being vigorously defended as they are considered to be vexatious and without substance,'' a Bendigo spokesman said.

Mr Simms said: ''We plan to defend it. I don't believe the allegations are true.''

On its website KG2, which bills itself as bringing the power of ''big data'' to bear on agribusiness, claims the database is the ''largest information warehouse on Australian farmers''.

Documents filed with the court show that Mr Marshall believed the KG2 database had the potential to quickly add $3.3 billion to Rural Bank's loan book, doubling its market share.

''That's a compelling reason to access your database if ever there was one,'' Mr Marshall wrote in a February 11 email to KG2, seen by Fairfax Media.

The database contains detailed financial information about 120,000 farmers, who Mr Marshall said in the email had total debt ''for us to chase'' of $16.8 billion.

Rural Bank estimated it could add $7 million a year to profit, according to court documents.

Mr Simms, a former bankrupt, worked for KG2 as director of technology strategy between December 2012 and September 11 last year and is now working for Rural Bank as a consultant.

His LinkedIn profile lists his current position as ''head of data insights Rural Bank'' at a company he owns, Clear Position, where his duties are ''implementation of a scalable data insights and business intelligence program to operationalise the bank's extensive data assets in the agriculture sector''.

KG2 alleges it gave Mr Simms ''his only copy of the database'' on March 18 last year, instructing him to maintain a back-up copy ''off-site to safeguard against the risk of damage or destruction''.

It is alleged Mr Simms ''unlawfully retained possession of the database'' after quitting the company.

KG2 alleges he began ''double dealing'' in December 2012, the month he was hired.

The company claims Mr Simms and Mr Marshall ''maintained two separate streams of email communications'' - one through their official email accounts and the other using Google Mail accounts. The Google Mail correspondence allegedly ''contrasted and conflicted'' with email sent using the official accounts.

The two men allegedly discussed setting up a new business, where Mr Marshall was to be director of customer strategy and receive $360,000 a year, plus bonuses and a stake in the company.

On a trip to New Zealand in July last year the pair allegedly talked about the new venture and the terms of Mr Marshall's proposed employment.

''From time to time, Mr Simms caused payments to be made to Mr Marshall,'' KG2 alleges.

KG2 alleges Rural Bank has had access to the database since at least March 20, when Mr Simms met representatives of the bank and New Zealand marketing group Eleven.

''At the meeting, Mr Simms was tasked with providing Bendigo Bank data by 26 March 2014,'' KG2 alleges.

The same day, KG2 wrote to Rural Bank, warning it not to use the database because it did not belong to Mr Simms.

Mr Simms allegedly then signed a confidentiality agreement with the Bendigo and in April and May went on to discuss commercialising the database with Rural Bank.

He allegedly used forged loan documents to show the bank that Sonia Simms Pty Ltd, a company run by his wife, solicitor Sonia Simms, had the financial capacity to go ahead with the proposal.

Bendigo Bank announced its $1.78 billion purchase of Rural Finance Corporation on May 5.

KG2 accuses Mrs Simms of being an accessory to Mr Simms' fraud and claims she breached her duties as a solicitor.

On Friday, the case was adjourned to August 8

Author: Ben Butler
Source: Sydney Morning Herald


Last modified onSaturday, 08 November 2014 23:23

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