One.Tel chief sued over card debt

JODEE Rich, the disgraced founder of failed Australian telecoms group One.Tel, allowed company employees to photocopy his American Express card so that they could use it and help him rack up a debt of almost A$400,000 (£143,000), an Australian court was told.

American Express is suing Rich for A$394,823 in corporate credit card charges he incurred in just three months before One.Tel's A$2bn collapse in May last year. The sum comprises the card debt of A$283,100 plus an extra charge of 3% a month for not paying on time.

Rich is refusing to pay, claiming that the debt belongs to One.Tel, which is now bankrupt and has ceased trading. He is still defending a controversial A$7.5m bonus payment that was made to him in the company's dying days.

The circumstances of One.Tel's demise are being investigated by an Australian legal inquiry which has the power to bring criminal charges if it finds that executives let the company trade while insolvent.

Rupert Murdoch's son Lachlan and Kerry Packer's heir James were made to look foolish over the collapse which cost their families, who were key investors in One.Tel, around A$700m.

In evidence to the credit card hearing, Rich said he did not think it was necessary for him to read the terms and conditions of his card because he was sure he could not be held liable. 'It's my policy that it was not appropriate for executives of the company to be personally guaranteeing company expenses. I would have suggested we not use those corporate cards,' Rich said.

Lawyers for American Express told the court Rich had signed two forms when applying for the card by which he agreed he was personally liable for the card expenses.