SYDNEY — James Packer and Lachlan Murdoch are licking their wounds after disastrous investments in Australian telco One.Tel cost their fathers’ companies more than $A900 million ($468 million).
News Corp. and Packer’s Publishing and Broadcasting and Consolidated Press Holdings are the biggest investors in One.Tel, which was declared insolvent and placed in the hands of an administrator Wednesday.
Packer and Murdoch have been directors of One.Tel for more than two years and personally guided their firms’ stakes in the telco. In a joint statement, they said, “Like all shareholders we are angry. We have been profoundly misled as to the true financial position of the company. We intend to explore all remedies available to us.”
Founded in 1995, the firm has wireless, fixed line and Internet businesses in Australia, Europe and Hong Kong. The founders, joint managing directors Jodee Rich and Brad Keeling, were ousted May 17 after it became apparent the company’s finances were not as healthy as claimed.
Regulator the Australian Securities and Investments Commission has launched an investigation into the circumstances leading up to the collapse.
News Corp. had invested $300 million in the telco; PBL/CPH had chipped in $232 million.
“The One.Tel fiasco means that — until they pull off a really smart deal that rights the wrong — both James and Lachlan will face questions from the market on their judgment and legitimacy,” said one commentator in the Australian Financial Review on Thursday.