Sydney view: Distressed Rich gives One.Tel victims a laugh

By GILES PARKINSON

One important lesson has been learned since the dramatic collapse of HIH in March: it's no reason not to have a good belly laugh.

When HIH collapsed with debts of around $A4 billion ($5 billion), there was a lot of anger. Many people had lost money, many had homes uncompleted, and many businesses faced collapse.

All that bitterness was directed at one target: HIH boss Ray Williams - a man rarely seen smiling but who, it has been revealed, managed to enliven the dreary world of reinsurance with the most extravagant and expensive parties and indulgent gifts for his favoured employees.

The effects of the collapse were so wide that there was talk of Government assistance, and demands for Government investigations, but politicians don't like to deal with complicated issues such as reinsurance and shifted uncomfortably from foot to foot.

It was only when they realised it was easier to say yes than to explain why they were going to say no that they agreed to most demands.

With One.Tel, it has been altogether different. From the moment One.Tel directors James Packer and Lachlan Murdoch told the world they had been misled and the company was insolvent, the accusations and finger-pointing has been on for young and old.

Prime Ministers and Premiers have been issuing grave words of support for the disenfranchised and out-of-pocket, and have been imploring the One.Tel co-founders, Jodee Rich and Brad Keeling, to repay the controversial $A14 million in bonuses they received last year.

The One.Tel founders, who have said they are sincerely mortified by the whole adventure, have had no choice but to bow to political pressure.

Keeling was first off the mark when it came to giving back his hefty bonus of last year (minus tax of course). Rich was not so fast, but his statement on Tuesday left an indelible mark on the 3000 creditors that it was addressed to.

Rich said he would hand back his bonus, and his (now worthless) 500 million shares, on the condition that the creditors sign a deed of arrangement and keep the company afloat.

"I am deeply distressed at the situation at One.Tel," his letter began. "When I left the company on May 17, it was in the belief that One.Tel would be funded by an injection of $A132 million in capital and have a positive outlook for the future.

"Events since then have changed this outlook and I am anxious to understand how this has happened."

He is not alone. Rich said he would cooperate with the Australian Securities and Investments Commission and wanted to pledge his personal funds to assist One.Tel.

"I have advised the administrators that I want to contribute ALL of the net amount of the bonus of $A6.9 million towards securing the welfare of all One.Tel employees," he said.

"That is approximately $A4.2 million net of tax - if I can secure a tax refund on the bonus of $6.9 million, that will also be made available.

"I will make the funds available as soon as the sale of my home at Darling Point goes through."

His letter concluded: "I believe in One.Tel. I believe in One.Tel staff. I want One.Tel to survive. I have demonstrated this with cash and shares for staff and the company."

Rich might just as well have been offering confetti.

That is why his letter was greeted by smirks and laughter at the creditors' meeting.

The administrators have done a rough count. Total debts exceed $A600 million and they are accumulating at $A12 million a week. Assets are pretty hard to estimate, but the administrators are fairly sure there will be a big shortfall.

Optus, Telstra, Lucent Technologies (which built One.Tel's new mobile network) and the Toronto Dominion Bank are the main creditors, each owed at least $A50 million.

The dealers and resellers are owed less, but are the most vulnerable. They will likely see none of their money back - unless, of course, Mr Rich shares the rest of the proceeds he will get from the sale of his $A14 million house.