Pyne Gould Corporation director and major shareholder George Kerr.
Pyne Gould Corporation director and major shareholder George Kerr.
High-profile businessman George Kerr said he "was in an impossible situation and was exploited" in deal over a A$37 million loan from a company associated with a wealthy Australian.
Kerr, the managing director of Pyne Gould Corporation, is an investor in a now-inactive private equity fund called Torchlight that wasput into receivership last year by Wilaci, a company associated with John Grill.
Grill, chairman and former chief executive of WorleyParsons, was deemed to be one of Australia's top 50 richest people in 2013.
In August 2012, Wilaci made a A$37 million 60-day loan to Torchlight, which came with A$500,000 per week fee if it was paid back late.
Torchlight took 19 months to fully repay the advance and in May last year, Wilaci issued a A$33.6 million demand to the fund, around A$31 million of which was loan fees and interest.
Kerr described the lead up to the loan from Wilaci, which advanced A$37 million for part of a deal Torchlight entered into with Bank of Scotland International across the Tasman.
While Kerr said a A$1 million fee was initially discussed, this was upped to A$5 million, which he agreed to because it was too late to go elsewhere for financing.
A A$500,000 per week fee for late payment was then also included in the agreement and Kerr told the court he had no alternative but to accept it, despite the terms being "incredibly unfair".
"I was put in an impossible situation and was exploited despite my experience," Kerr said.
The case is expected to run all week and Kerr's cross-examination by Queen's Counsel Nathan Gedye will continue tomorrow morning.
