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AD 09-135 Opes Prime schemes of arrangement approved

Tuesday 4 August 2009

ASIC has welcomed court approval of the creditors Schemes of Arrangement giving effect to the settlement offer to Opes Prime clients.

Following the collapse of Opes Prime, ASIC has worked closely with the liquidators of Opes Prime and initiated mediation discussions with Merrill Lynch (International) Australia Ltd, Merrill Lynch International and ANZ Banking Group Ltd to resolve claims between the parties. ASIC believes that the settlement accepted by the creditors and approved by the Court, achieves the purpose of the mediation and makes commercial sense. Importantly, it avoids the need for costly litigation by the liquidators and the clients of Opes Prime.

The Schemes oblige ANZ and Merrill Lynch to pay $226 million to the Opes Prime liquidators. In total, with other assets to be paid or recovered, it is expected that there will be approximately $253 million available for the creditors who will receive an estimated dividend of 37 cents in the in the dollar. In accepting the schemes of arrangement, the Opes Prime liquidators and the Opes Prime clients must release Merrill Lynch and ANZ from all claims and legal proceedings.

Subject to any appeal against today’s decision and compliance by ANZ and Merrill Lynch with their obligations, ASIC will release both ANZ and Merrill Lynch from potential legal claims ASIC had against each of them. ASIC had identified two potential claims. The first was a potential claim for compensation due to an alleged contravention of the managed investment provisions of the Corporations Act (the Act) by Opes Prime and alleged involvement in the contravention by ANZ and Merrill Lynch. The second potential claim was a civil penalty and compensatory action against the directors of Opes Prime, and the ANZ bank.

ASIC announced in March 2009 that it has put in place an Enforceable Undertaking (EU) from the ANZ in relation to ASIC’s investigation, arising from the Opes Prime collapse, into ANZ Custodial Services, a division of the ANZ Group.

ASIC’s investigations arising from the collapse of Opes Prime continue. ASIC has substantially completed these investigations into the conduct of the directors and officers of Opes Prime and is now considering what, if any, further action should be taken. ASIC does not intend to make comment further on these matters at this time.

See ASIC's previous Media Release MR 09-37 Opes Prime: proposed settlement and ANZ enforceable undertaking

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