A director at failed investment firm Opes Prime duped a bank into lending him $95 million days before his company folded, a court has heard.
As director of Opes Prime Stockbroking Ltd Julian Alexander Smith allegedly signed the loan with ANZ bank despite knowing there was a $200 million shortfall in his company's accounts.
He is accused of then using the $95 million loan to pay the debts of another one of his companies.
Smith has pleaded not guilty to two counts of using his position as director dishonestly to gain advantage.
Crown prosecutor Greg Lyon said Smith knowingly misrepresented Opes Prime's financial position to the ANZ to obtain the loan.
"He held back key information about the financial position," Dr Lyon told the Victorian Supreme Court trial on Thursday.
Smith was also prepared to let Opes Prime take on the "crushing burden" of the loan despite it not being in the company's best interest, Dr Lyon said.
"An honest director would not have signed the loan documents," he said.
Three days after signing the loan documents in March 2008, Opes Prime's directors declared the company insolvent and voted to place it into administration, the court heard.
Opes Prime collapsed owing about $650 million to its creditors.
In a major blow to Opes Prime's operation, Dr Lyon said one of its key clients had a $100 million shortfall in his account with the firm.
Dr Lyon said Smith was involved in the operation of several other companies linked to Opes Prime and funds were transferred between the companies which provided a false impression of their financial positions.
The defence has yet to give its opening to the trial.
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