Rodney's Trouble At The Margin Sorted By $2m Old School Ties
Sydney Morning Herald
Saturday October 12, 2002
Rodney Adler yesterday denied that $2 million he got from his old school friend, the Monaco-based financier Paul Brown, was some sort of payoff for Mr Adler's efforts in getting Mr Brown $13.5 million from an HIH offshoot.
In April 2000 Mr Brown banked $US8.2 million, worth $13.5 million, from burglar alarm company, Home Security International (HSI), covering an IOU struck two years earlier.
HSI's finances were so parlous it had the money only because Mr Adler had agitated at HIH, where he was a director. Mr Adler was also chairman of HSI but he felt he could simultaneously act in the interests of both companies.
In order for HSI to pay Mr Brown, HIH bought out a subsidiary for $12 million cash. Within six months Mr Brown had lent Mr Adler $2 million and handed over a total of $6.2 million to HSI chief executive, Brad Cooper.
``The deals, the loans that you had with Mr Brown in 2000, and investment that Mr Brown made in Mr Cooper's company, were means by which you and Mr Cooper could be recompensed for the efforts you made," HIH commission counsel, Robert Beech-Jones, suggested yesterday.
Mr Adler said he couldn't speak for Mr Cooper but denied the allegation against himself.
The former FAI Insurances chief said he needed money fast when he went to Mr Brown in September 2000 because he was getting margin calls on a plunging share portfolio that he didn't want to sell.
``I went to boarding school with him when I was 12 years old. I went to him because he was a friend. He was a financier. That's what he did."
Mr Adler eventually covered the debt by transferring assets worth $1.5 million and selling Mr Brown a stake in his private company, Adler Corporation. He said he did it that way because he was barred him from sending money offshore.
Mr Cooper returns next week for further questioning.
In August, 2000, he faxed a handwritten note to Mr Adler outlining a grand restructure plan for HSI. The note, known as the ``Hayman Island fax", has created much mirth in the commission for its spelling mistakes and other eccentricities. ``$20 million round Rodney to pay all debts life is then good," Mr Cooper scrawled in the margin.
Mr Adler said: ``I don't know if this is meant to be round Rodney or round robin", to which Mr Beech-Jones opined ``round robin might be a variation on round Rodney."
``Please don't give the press any more ammunition," Mr Adler pleaded.
© 2002 Sydney Morning Herald
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