Megafert Megascam (Part 2)

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By Dwain Duxson - An Ag Enthusiast

Megafert Megascam (Part 2) - This is part of a 2 part series that is somewhat similar to the S&W Seeds saga, except the numbers are bigger. This person who was on the receiving end lost several hundred thousand dollars in the deal. You can read the first 1 parts here. Continued….. "The companies made three offers to the NAB; the first offer was to repay the bank $27 million, which they had in stock and cash; the NAB rejected this offer. After preselling for another few days, the offer was increased to $36 million again, this offer was rejected, and the NAB extended the deadline to the 10th of February 2010 with a demand for $40 million.

The companies accepted this deal and then organised to fictitiously sell the companies to a bogus purchaser who opened a separate bank account into which $27 million of the prepayment funds were transferred, and on the 10th of February, a bank cheque was drawn payable to the NAB in Melbourne by the bogus purchaser. The balance of $13 million was a direct transfer from a NAB account on the 10th of February 2010. The bogus purchaser requested the company directors have all their personal guarantees written off.

One of the victims confronted a senior bank official and asked him two questions. 1) If the client base had not prepaid the extra $ 13 million, where would it have come from? He gave a blank look in response. 2) If the companies gave the prepayment funds to satisfy the NAB's demands, the NAB would rescind the personal guarantees of the company directors? The answer was, prove it. 21 dealers were involved, and when we went to collect our prepaid product, the supply had 'run out'. We were told the ships were running late and to purchase the equivalent product from other suppliers and send the accounts to Megafert for payment.

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It was June 2010 when we realised we were not going to get paid. We had to wait until May 2011 before the ATO put the companies into administration over a debt of $925,497.00. At the first creditors meeting held on the 24/05/2011, we realised what and who was involved. During 2012-13, the administrators conducted Federal Court examinations held in Adelaide; some of the victims attended all these court examinations and learned what had transpired during the period 2009-2010.

The NAB had been negligent in lending to the insolvent companies, which had received $ 13 million of prepayment funds, so it was agreed in late 2015 that some of the dealers involved would challenge the NAB, and a supreme court writ was issued and served to NAB on the 24th of December 2015. This issue took four years in the Supreme Court to arrive at a partial settlement of the claim, with the NAB agreeing to pay 17.5 cents in the dollar lost, plus all the group's expenses. The group's total loss diminished considerably when the NAB would not pay for any prepayments made after settlement day, the 10th of February 2010.

In the opinion of some, the NAB admitted guilt when they made an offer to settle with a minimal amount; their reason for the small amount was all the other parties involved should contribute towards the settlement, i.e., the legal firms and the consultants involved etc. At a get-together of the prepayment group, it was revealed that every member involved in the group who had on sold the product to their client base honoured their commitment and purchased the product from other suppliers to satisfy their client needs..... The End. Do you have any comments? Reply to dwaind@farmtender.com.au

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