Title Economics References Committee
08/08/2012
Effects of the global financial crisis on the Australian banking sector
Database Senate Committees
Date 08-08-2012
Source Senate
Parl No. 43
Committee Name Economics References Committee
Page 61
Questioner CHAIR
Williams, Sen John
Eggleston, Sen Alan
Cameron, Sen Doug
Responder Mr Butler
System Id committees/commsen/112965af-6f32-4291-aa97-a23457bc2a37/0007


Economics References Committee - 08/08/2012 - Effects of the global financial crisis on the Australian banking sector

BUTLER, Mr Sean Maurice, Private capacity

[16:12]

CHAIR: Welcome, Mr Butler and thanks for helping us today. I invite you to make an opening statement if you would like. Please keep it brief as we are running a bit over and we will need to finish on time.

Mr Butler : Thank you very much for inviting me to this hearing. I am from Perth and appear as a private individual. I have read many of the submissions to this inquiry and my case is one of many involving Bankwest. My motivation to appear before this committee is not just in my interests but in the interests of the many hundreds of other Australian families and businesses that have been affected under the changes of management at Bankwest over the last few years. I have lodged two submissions to this inquiry, being Nos. 111 and 124. I will tell my story briefly as an example of one Bankwest customer.

If anyone had told me this story several years ago I would not have believed it. I thought it could not happen in Australia and I would have thought there would be laws and regulatory bodies to stop this sort of thing happening. I am a married man with four children and a self-employed businessman, being a registered builder and a hotelier in Western Australia. My wife and I had built up a business from nothing in 1989 to a successful hotel-building business in 2011—22 years of hard work and savings. We owned a 50 per cent share in two hotels in Western Australia. Our profitable company rebuilt the Lighthouse Beach Resort in Bunbury, which became one of the most popular hotels in town, and we were also rebuilding the 120-year-old National Hotel in Fremantle. Our profits were at record levels before Bankwest receivers were appointed in 2011. We had record forward bookings and the profits in the June 2011 quarter were the best on record. Turnover for the year was the best ever and profits were trending upwards. Our Bankwest dealings were good until 2010. We were told we were model customers. All interest was paid over an eight-year period. Ian Corfield, the chief executive of Bankwest Business personally inspected our properties and personally met with me and discussed our business.

This is a brief summary of the events. In 2007, our main property, the Lighthouse Beach Resort, was valued at $20 million. That was at the peak of the property boom, I suppose. A few years later, in 2009, it was revalued at $14.7 million, which was a substantial discount but we thought that was fair enough given the way the property market had gone. On 24 March 2010 an article appeared in a local newspaper, which I have given you a copy of. It basically said that the policies within Bankwest were changing. That started to sound alarm bells with us. It mentioned that a 'Perth property developer has been warned to expect increasing scrutiny from their lenders' and that we would have 'a challenging relationship' with the bank but that it is 'not personal'.

At that stage, everything with our business was fine. We were going extremely well. Just five months after the reduced valuation, Bankwest advised us that they needed another valuation, at our cost, that being $9½ thousand. The new valuation came in at 22 per cent less than the valuation of just five months before. At that point our business was still a good business. It was still generating money, it was still profitable and it was still paying all the interest on all the loans. I wrote to Bankwest saying that I believed saying the valuation was extremely pessimistic, but basically they just said we had to wear it.

On 10 August that year—just a few weeks after the valuation was given to us—Bankwest advised us that our interest rate margins would double, from bank bill swap rate plus 1.25 per cent to bank bill swap rate plus three per cent. So our interest rate doubled within a few weeks of getting that valuation. I appealed to Bankwest to see if they would negotiate that, and they just said there was no room for negotiation and that we just had to wear that. So basically we decided to either refinance or sell the properties.

In January 2011 we had further discussions with Bankwest. They said they would not budge on the higher interest rates being charged. In February 2011 we got a purchase offer for the Lighthouse Beach Resort at $14 million, that being 22 per cent higher than what the evaluation was. In other words, we got an offer for it that was closer to the original valuation. It has almost proved them wrong. At that point our business partner, himself a banker, advised that he would match the $14 million offer and buy that property.

On 31 March Bankwest advised us that if they did not get all their money back by 31 May it would get ugly. They advised us that if arrangements were not made to pay all the money back in one lot then penalty interest rates of 18 per cent would apply. Our business partner—the banker—then advised that he had changed his plans and did not want to buy the property anymore. So I advised Bankwest that our business was still capable of paying all the interest on all the loans and that we would put things back on the market. We had four separate properties we could sell. But they refused. They said they wanted all their money back in one lot. Our profits were at record levels, but I said we just could not afford to pay the 18 per cent interest rate.

Senator WILLIAMS: Who could?

Mr Butler : Exactly. On 22 June Bankwest issued a deed of forbearance, which I have just heard discussed and which I have given you a copy of.

Senator EGGLESTON: Do you want to ask for these documents to be tabled?

Mr Butler : I do not mind if they are. I would quite like them to be, but it is really a matter of whether you think they should be tabled.

Senator EGGLESTON: If you request it of the committee they can be tabled.

Mr Butler : I would like this deed of forbearance to be tabled, please, if possible.

CHAIR: Thank you. We will accept them and consider them as a committee in normal practice.

Mr Butler : Thank you. The deed of forbearance is just given as an example. In a nutshell, without going through the pages and pages, it has a confidentiality clause, so we cannot tell anyone what is being done.

Senator WILLIAMS: You can, now, here!

Mr Butler : It has a fee of $200,000 if we sign it, which we believe was excessive. The bank knew we were capable of paying all our interest going forward—that is summed up in that deed. So basically the deed says: 'You keep paying your interest going forward; we know you're capable of doing it. You pay your interest, we'll charge you $200,000 in fees and if anything goes wrong you can't tell anyone. And guess what? If you trip over the line, your interest rate is 18 per cent.' That was just to extend our facilities for five months. We took this to our lawyer and our accountant, and they said we would be absolutely crazy to sign it, so we did not.

Bankwest then advised us that our interest rates would double again—the interest rates that we were on at that stage—to bank bill swap rate plus six per cent. We got an offer from our business partner at that point for $13.3 million for the Lighthouse Beach Resort, which would have paid off most of our debt. Unfortunately, Bankwest said they wanted all their money back in one lump sum. We had four separate properties at that stage that we could have sold separately to sell the debt back progressively. They knocked that offer back. They said, 'We want our money back all in one lot,' and then basically they brought their receivers in. That is when the trouble started.

Bankwest appointed Taylor Woodings as receiver-managers. They charged us up to $525 an hour, and they had three or four accountants running my business. They told me not to work in my business. I complained and left them to it, thinking they would do the right thing, They told me not to work in another business in the town; there was a conflict of interest. Staff were told not to engage with me. I was told not to talk to media. Taylor Woodings refused to tell me what was going on anyway. All our profits were taken. It was a total cone of silence. They stopped paying me, did not acknowledge that my wife and I had been with the business for 20 years and were employees. I was in an impossible situation—no money, no job, told to shut up and keep secret, could not get social security because of assets, had a wife and four family members to support. They told me not to ask questions as doing so adds to the cost of receivership. Our staff were in tears. They were scared. These are licensed thieves hijacking a good-cash-flow business.

The following three incidents show what Taylor Woodings were like. I could give you volumes, but this is just one little bit. Taylor Woodings advised us—and I think I have given you a copy of this within those documents I gave you—that we could not inspect the site when I had a potential purchaser, who was a builder friend who was going to put money in and buy them out. So we had people who wanted to buy the business and we were told not to inspect it. That is in writing. A staff member called me to advise that there were dangerous activities at the hotel. It is a 70-room hotel where families come and stay. There were children in the swimming pool one weekend bomb diving, and we had a near-drowning incident a few years ago. I rang up the receivers; it was on a weekend, and they were not there. I had rung and rung and they were not there, so I rang up the hotel management and told them someone was going to get drowned, and they stopped it—which was nothing to be thought of at the time. An electrician was working on a part of the hotel, drilling asbestos. I found out about it through friends. I rang up the receivers. I could not get hold of them, so I rang up the electrician directly and said: 'You're drilling asbestos in a confined space. It is really dangerous. Do not do that.'

As a result of those three incidents, which are hardly criminal—in fact, it would be criminal if I did not act—Taylor Woodings issued myself and my wife with termination notices. We were sacked, basically. We took this to Fair Work Australia and the Fair Work Ombudsman. Myself and my wife had a phone call from the Taylor Woodings crew—there were three then, each on $500 or $600 an hour—as well as two of their lawyers and a lady from the Fair Work Ombudsman. Basically we were told that is the way it is; it is going to have to go through the system, and there is nothing we can do about it. Our employment was terminated, Taylor Woodings employed their staff to do what myself and my wife had been doing for 20 years. My wage at that stage was about $87,000 a year. We found out afterwards that Taylor Woodings had been charging, to do what I did, $110,000 a month.

I wrote to Bankwest protesting and outlining the lies and requesting a meeting and answers. No answers to the false allegations were given. Taylor Woodings put a submission to Fair Work Australia stating their case. Within that submission were a series of lies to justify my sacking. These lies, I believe, are serious, false and misleading statements. I sent a letter to Taylor Woodings saying that sacking me and my wife for no reason was indefensible. We had reported this to ASIC. A few weeks later, ASIC advised me that they would not take any action on the misconduct. I think I have given you that document.

CHAIR: You have raised your allegation that they lied. As a result of that, what we will probably have to do now is write to them and give them an opportunity to respond as well. As a courtesy, I needed to interrupt you at this point to let you know that. Please proceed.

Mr Butler : Actually, that is a valid point, because I have repeatedly asked them to justify these statements in which they lied. This is just a clanger; they have sacked me and installed themselves because of lies. In fact, before I came to the Senate committee meeting—a few weeks ago—I sent a letter to Taylor Woodings saying that I was going to appear before this Senate committee and asking them if they could respond to this. They have not responded consistently. I got an email, which I will bring up later, at 4.35 yesterday afternoon threatening me with action if I submitted this document.

Senator WILLIAMS: If you what?

Mr Butler : If I discussed this document.

Senator WILLIAMS: Here today?

Mr Butler : Yes.

Senator WILLIAMS: You are under parliamentary privilege.

Mr Butler : I can prove that.

Senator EGGLESTON: Do you wish to table that document?

Mr Butler : Yes, I will. I have that letter.

CHAIR: Did they send you an email telling you that?

Mr Butler : Yes. I have it here.

CHAIR: If you could table that, that would be appreciated.

Mr Butler : Yes. I have not given it to you, but I have it here. I was not sure whether I could table it.

Senator EGGLESTON: You can table both—the list of allegations plus the email.

Senator CAMERON: I would just like to raise an issue here. I think it would be good if we could take Mr Butler through his rights as a witness here again, so he knows what his position is. I also propose that we write to Taylor Woodings as a matter of urgency and see if we can get them to appear this week during these hearings.

CHAIR: I can do that. I am not sure when we will fit them in.

Senator EGGLESTON: When you say 'his rights', do you mean an explanation of privilege, Senator Cameron?

CHAIR: I think he means a repeat of part of what I read out this morning, Just for your benefit, at the opening of these proceedings this morning I read a statement. That statement included: I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee. Such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to the committee.

Senator EGGLESTON: And you are tabling your two documents—the letter and the email?

Mr Butler : Yes, I will table both. It is just one part of the whole, but I think it is pretty serious. As a result of our protestations—our kicking up a stink, I suppose—eventually they paid us out a small amount of entitlements, but we were still left sacked and we were still left with Taylor Woodings taking the business over.

On 2 February we had discussions with Vaughan Groves from ASIC, basically saying that our complaints were outside their charter but advising us that there were legal avenues we could take to address the issue. On 14 February the federal member for Fremantle wrote directly to Bankwest requesting transparency. Everyone I had told could not believe it, so we had the local federal member writing to Bankwest for transparency. The request was ignored. I think I have included that letter there. So Melissa Parke wrote to them, and they still refused. It gets to, 'What can you do?'

Our advisors inform us that the conduct of the banker involved in this situation is fraudulent, negligent, misleading and deceptive, and in breach of fiduciary obligation. I have also been threatened with legal action if I make that public—but I have anyway. This was raised with Bankwest and Taylor Woodings, but this advice has been ignored. This conduct is attributed to a very senior banker, but no action has been taken. I believe there is a degree of criminality in this situation. Our lawyers requested release of information from Taylor Woodings on our business partner dealings with the receivers. As of today, nothing has been released. Numerous letters were written requesting information, all of which were denied. They told me my questions were adding to the costs of the receivership. I will briefly discuss the sale process, because we lost millions of it. We had two properties. The Lighthouse Beach Resort was put on the market. I put an offer in to buy it for $13.3 million with an investment partner. We were told that our offer would not be accepted because it was subject to the sale of another property that we had and that was also with Bankwest. So we had two properties and if we had sold one we could have bought the other. But basically they said you cannot buy one unless you have sold the other. We were basically stuck even though, in a normal situation, we could have sold one and kept the other. I approached others to form a syndicate to buy the property and they were preparing to put an offer to buy it for $14 million but they were told not to by the selling agents.

CHAIR: Why?

Mr Butler : I do not know why. I requested to be told what was going on—whether the property had been sold or not. The selling agent said that Taylor Woodings had instructed them it had sold. But in a meeting I then requested with Bankwest Taylor Woodings admitted that it had not actually been sold. So, because of my inquiries, it went back on the market, by which time the syndicate that was interested in buying it had bought another property elsewhere. So we had interested parties and they were preparing to put an offer in—it is all documented—and they were told to go away. We found out that the property had not been sold and then it went back on the market.

I was then told that any offer I made had to be higher than $12 million to be in the running. My finance broker requested up-to-date financials to assist with funding. This is up-to-date financials from my own business they were now running and they had had it for six months by this time. So the finance broker wanted up-to-date financials to organise funding for it. That was denied. We could not get financials on our own business from Taylor Woodings or Bankwest. Meanwhile, amidst all this secrecy and deception, our business partner, a prominent banker himself, negotiated with Taylor Woodings without our knowledge to buy it for $9.5 million—$4½ million less than what he had offered just a few months before. We have been advised that this conduct is illegal. That is one property.

Senator WILLIAMS: Were you a company?

Mr Butler : Yes.

Senator WILLIAMS: Under section 420A they must make the best effort to get the maximum price.

Mr Butler : Yes.

Senator WILLIAMS: And it did not go to auction?

Mr Butler : No.

Senator WILLIAMS: They had offers of $14 million and it was sold for $9.5 million?

Mr Butler : Yes.

Senator WILLIAMS: Well, we will leave it with the committee to see what they do in relation to 420A.

Mr Butler : It is unbelievable. I have told friends and they do not believe me. They say, 'This couldn't happen.' Well, I have got all the proof of it here. Our lawyers cannot believe it and our accountants cannot believe it. They just think, 'This can't happen in Australia.' Well, they do believe it. They say the laws have got so out of whack that it does happen.

The other property I had was the National Hotel, which is a beautiful old heritage building in Fremantle which we were rebuilding. It was valued at $7 million before the receivers got it. I was working on this property and working out the cost to complete it. It was halfway through being rebuilt. We had not finished the interior of it. When I was sacked, of course, I could not work on it any more and all of a sudden I had four accountants all getting paid $400 and $500 doing my work. They took it over and it became a complete disaster. We made an offer to buy it off the receivers and we were told that we could not because our offer was subject to the sale of the other property. We were told our offer had to be over $5 million in cash to buy it. I had a partner who was very keen to buy it but they would not take our offer. Eventually we found out that it had sold for $3.6 million, half its valuation, to foreign investors. It has been in Australian hands for 120 years.

We then put legal pressure on Taylor Woodings and demanded documents taken from our offices without legal jurisdiction—which is legal speak for 'stolen'. My lawyer said, 'Don't use the word 'stolen'; use the words 'taken without legal jurisdiction'—but that is actually what it was. Eventually they gave us boxes back. They gave us seven boxes of our personal stuff back, including all of my wife's and my personal superannuation. It is just another world! At that point Taylor Woodings threatened to sue us if we disclosed this to the media.

Bankwest then advised us that Taylor Woodings do not act for Bankwest and that any complaints over their behaviour should be directed to Taylor Woodings. Bankwest by this time are charging us 18.8 per cent on the Taylor Woodings fees and are now calling on us for any shortfall. It is almost criminal! The interest rate previously was 7.8 per cent. So we have gone from 7.8 per cent up to 18.8 per cent. We did not know what Taylor Woodings had actually charged us. On 8 June this year, for the first time since their appointment, as a result of our lawyers getting involved, they admitted to what they had charged us for 9½ months. For 9½ months of doing what I used to do they had charged us $1,055,000.

Senator EGGLESTON: What cost would you have incurred for doing that work?

Mr Butler : As I said, I was paying myself $87,000 a year. I just could not believe it. On 11 June justification of the fees was requested—and I have tabled this document. I could not believe it, so I requested justification of the fees. We got a letter back and I will briefly read it. It says: 'The receivers are not under any obligation to provide you with further information or documentation referred to in this letter. The fees and charges are subject to legal and professional privilege and, on that basis …'. Basically, they said go away and shut up.

Senator EGGLESTON: Do you want to table that document as well?

Mr Butler : Yes. I have given the committee that document.

CHAIR: Thank you.

Mr Butler : Shortly after that we got a letter from the Financial Ombudsman Service, who we had gone to while this was happening. It was a three-page letter. It sums up just how hopeless it is. Their conclusion—and this is after Bankwest said the Financial Ombudsman Service is there to help us—was that they were unable to progress or reconsider our matter because it was under receivership and they had not received the authority of the receivers. So, in other words, they need the authority of Taylor Woodings, who have robbed us, to investigate. The second point: Taylor Woodings is not a financial service provider, so they are unable to do it anyway. The third point: 'The loss exceeds half a million, so we cannot do it.' The fourth point: 'We cannot review any actions of a third party of the dispute or compel Bankwest to take any actions.' It is just hopeless! It is just a joke that FOS are there, and you wonder why you try.

Yesterday I got the document which I have just given to the committee. I let Taylor Woodings know that I had made two submissions to the inquiry and I let Bankwest know as well. I said, 'I would like to give you the opportunity to respond if there is anything that you think is inaccurate, though I believe it is all accurate.' They have not responded but at 4.35 pm yesterday I got that email from Taylor Woodings effectively saying in their gobbledegook, 'Get advice before you talk.'

Senator EGGLESTON: You are covered by total privilege here.

Mr Butler : Thank you. In summary, Bankwest have artificially devalued our business, doubled and quadrupled their interest rate margins and demanded all their money back in one sum, making refinancing virtually impossible. We were forced to sell and the receivers gouged our business and lined their pockets. It is a disgrace. Our losses to date total over $10 million as a result of this. The regulatory bodies seem powerless to act. Appeals to lawyers and politicians for transparency are ignored. Where can we turn?

In the Bankwest submission, which is No. 90 on this inquiry, they make a number of statements. I will not go into them now because we are probably running out of time, but they are just not true.

Senator WILLIAMS: Are you saying that Bankwest in their submission have given false statements?

Mr Butler : I believe they have. I can go through what I think is false if you want me to, because I have got it here. I do not know whether they have deliberately made false statements, but there are things like: 'Bankwest are not profiting out of putting companies into receivership.' In our case they clearly are. They are charging 18 per cent interest. They are making money out of our demise. That is just clearly a lie. They said in their submission that people have got avenues of redress, including the Financial Ombudsman Service. That is clearly a lie. They have said that they have a section within the bank that deals with inquiries. They will not do that with us. There are things in the submission that I think—whether they are intentional lies or not—are clearly false.

My case is far from isolated. Where there is smoke there is fire, I believe. Why did Bankwest try to stop this inquiry? Why are they on the offensive and trying to stop further action? I believe it is economic vandalism: a massive transfer of wealth from a productive entrepreneur—and lots of other people are involved—to accountants who act in an unregulated and seemingly corrupt environment. I am not alone; I am one of hundreds that this has happened to under Bankwest.

I have been told Bankwest were insolvent and that RBA bailed them out. We did not know this at the time and we could not understand why they became extraordinarily difficult to deal with. At a meeting with an employee from Bankwest, I said to a guy from Treasury that it must be interesting working within Bankwest and juggling the cash flows and he said, to my surprise, that at times they did not have money. He actually told me that there were times when Bankwest did not have money they were juggling things around behind the scenes. At that time I did not know how serious it was. At a meeting with a Bankwest business manager in Bunbury they told me that Bankwest Business Bunbury had not lent any money since the start of the GFC and they said something to the effect of, 'We call ourselves business banking'—referring to how ironic it was. So they were saying they were business banking but they had basically turned off the tap.

In a discussion with my business banking manager, he said to me that I was lucky that our business was not in the property section and was in the business section as lending in property had stopped altogether and Bankwest was trying to lose customers in this area. So I was actually told by a Bankwest manager that they had a book clearing operation in property and we were lucky we were in business. We were one of the ones that was swept up with it later. A new manager was appointed and in discussions with this manager I told him how frustrating it was dealing with Bankwest and he looked at me and said, 'I'm sorry,' and he left Bankwest a few months later.

Senator EGGLESTON: In your past have you had any business problems or gone bankrupt, insolvent or convicted of any criminal offences?

Mr Butler : No; never. I have been in business for 20-something years. I have had a profitable, solvent business until the start of 2011. I have never had a problem.

Senator WILLIAMS: You have never missed a payment?

Mr Butler : Never missed a payment until the start of 2011. When this happened, of course, we did.

CHAIR: The only problem you have ever had was created by Bankwest?

Mr Butler : Yes. We have never had a problem. In fact, we were put up as a model. Ian Corfield would fly from Sydney to meet people in Perth and our business was one of the first he was shown as a model business—or not as a model but as good customers, I suppose.

Senator WILLIAMS: Did Bankwest chase you to get your business?

Mr Butler : Not originally. Originally we went to them. But, in the height of the boom, they were saying to us, 'We will lend you more money.' When the boom was its peak they were actually saying, 'We'll lend you more money.' We actually did not borrow more money. We were fairly conservatively geared. We were at that point probably less than 50 per cent geared. We thought it was a boom. They saying, 'We'll lend you more money,' but we did not borrow more money. But then of course when it went the other way the pendulum fell, I think, too far back the other way.

The newspaper article that I mentioned quoted a guy in Bankwest—and it is probably a relevant quote. This is a Bankwest senior manager: 'Before the capital market dried up, banks were lending like drunken sailors in Singapore, driven by intense competition to grow their loan books by taking more risks, blowing out their loan devaluation ratios and financing land bank projects. Banks wanted to get market penetration. They were all thinking at the same time, 'You will get more profit through lending more money,' and for that reason were willing to accept greater levels of risk.' So they virtually admitted that they had gone too far out—and then of course the pendulum swung back the other way. In summary, I have only got a few more things to say; this sums up my thoughts on it. I think Bankwest lending and devaluation practices need thorough investigation. Something has to happen. The receivership industry needs thorough investigation.

Senator WILLIAMS: I tried that for three years.

Mr Butler : That is right. I have been given this report that was done through the Senate several years ago, and there are recommendations in it. I hope something comes out of this. There is no transparency. It is done in secret. Customers appear to be powerless to stop this. Charges need to be brought against individuals, I believe. I think there is stuff there that is criminally corrupt. There are some aspects of what has happened to me that are criminally corrupt and I am being told to shut up, so you have got to wonder why. I am just one of many who have been told to shut up, and you have got the proof that I am being told to shut up.

Senator EGGLESTON: You are saying that they did not want you to come to this inquiry and give evidence as you have today.

Mr Butler : They sent me an email saying—legal talk—'Get some advice before you say anything.' They did not say in so many words that they did not want me to come to the inquiry.

Senator EGGLESTON: But they warned you off.

Senator WILLIAMS: Three years ago at the inquiry into the insolvency practitioners' industry, liquidators, receivers, administrators, there were 16 recommendations, including stripping control of that industry from ASIC but yet the government is still not acting on it.

Mr Butler : It is unbelievable. I was probably feeling naïve. I did not think this sort of thing happened in Australia.

Senator WILLIAMS: I do not think you are Robinson Crusoe.

Mr Butler : No, I know I am not; there are lots of others behind me.

CHAIR: We have come to the end of the time that was allocated for you. Normally, we would have a few more questions. We have been asking questions as we have gone through. If anyone has any burning questions, I will allow them a bit of extra time. I would like to say thank you to you, Mr Butler, for sharing your experience with us. Quite clearly, it has been a very rough road that you have had to travel in recent times. From the sound of things, you are probably not at the end of that road yet. We appreciate you coming along and telling us of those challenges. We will certainly take all that into account. We have an opportunity at least to ask Bankwest about their experience from the other side and we will be testing that out, so thank you very much for your time.

Senator WILLIAMS: Mr Butler, the reason I pushed so hard for this inquiry was I was saying months ago when a lot of these things came to my office: why is this so? I realise that people go broke in business. I have been through dry gullies myself, I can tell you; plenty of them. I realise that banks are basically sound in Australia and do the right thing, but then you get these cases like yours and you question why they would pull the plug on you when you have never missed a payment. We have got the same case with Paul French who had a hotel at Cobar in western New South Wales. No overdraft, never missed a payment and the receivers knocked on the door, looked at the books and said, 'What are we doing here?' They sold his pub for about the value of nine poker machines. The idea of this inquiry is we are not a court.

Mr Butler : I know that.

Senator WILLIAMS: We are regulators, but I am glad you have come along and spoken freely. You are protected by parliamentary privilege. I will give you a word of advice: when you walk out of that room, don't say boo to anyone. Even if you make a comment like, 'I've said it all in this room,' once outside, if the media interview you, you could be liable. Please just say 'No comment' to anyone once you are outside this room.

Senator EGGLESTON: That is very important. All you can do is repeat exactly what you have said here, but it is better to say nothing. It is a criminal offence to intimidate a witness who seeks to appear before a senate committee. That was pursued legally many years ago in the case of Senator O'Chee in Queensland.

CHAIR: Thank you, again, Mr Butler, and thank you to the other witnesses today.

Mr Butler : I hope something comes out of it. I hope you dig deep and get to the bottom of it.

Committee adjourned at 16:49