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Judge halts Obeid cartel conduct case for tired banker to 'get some sleep'

by April 6, 2016 General

A banker giving evidence in a multimillion-dollar cartel conduct case against Moses and Paul Obeid has brought the proceedings to a halt after the judge ordered him to “get some sleep” because he was up all night working on a deal.

In an extraordinary turn of events, Federal Court judge Lindsay Foster adjourned the hearing on Wednesday after former Lehman Brothers banker and Obeid associate Gardner Brook confessed he was “sleep deprived” as a result of his nocturnal deal-making.

Gardner Brook leaves the Federal Court on Tuesday. Gardner Brook leaves the Federal Court on Tuesday. Photo: Louise Kennerley

Justice Foster had asked if Mr Brook, who now works in Singapore for Pan-Asia Capital Partners, was having “difficulty coping” or suffering from “some sort of impairment” in giving evidence.

Concerns had been raised by Cameron Moore, SC, the barrister acting for the Australian Competition and Consumer Commission in the cartel conduct proceedings.

Moses Obeid, right, leaves the Federal Court on Tuesday. Moses Obeid, right, leaves the Federal Court on Tuesday. Photo: Louise Kennerley

Mr Brook, a key witness in the ACCC’s case, was cautioned by Justice Foster not to work on any more deals while giving evidence.

“What I expect of you … is to get some sleep and not do another transaction,” Justice Foster said.

He said the litigation was “very serious” and Mr Brook needed to treat it accordingly.

A contrite Mr Brook promised he would repair to his hotel room immediately and refrain from working on transactions.

About an hour after the hearing started at 10.15am, Justice Foster ordered that the hearing be adjourned until 3pm.

The ACCC is taking civil action for alleged cartel conduct against Moses and Paul Obeid, two of former NSW Labor minister Eddie Obeid’s five sons, for striking an alleged deal with mining company Cascade Coal to withdraw rival bids in a government tender for coal exploration licences. The deal allegedly cleared the way for Cascade to win two of the licences in 2009,  including one over the Obeid family’s rural property Cherrydale Park.

The Federal Court has heard the Obeids received “substantial benefits” including $28 million in cash when the rival bids were withdrawn by Monaro Coal, a company acquired by members of the Obeid family during the tender process.

The competition watchdog is also pursuing Cascade Coal and two of its founding investors, Sydney businessmen John McGuigan and Richard Poole, for alleged cartel conduct, along with Mr McGuigan’s son James.

Mr Brook was brought on board by the Obeids in 2008 to “form a relationship with a mining company”, the court has heard. He was also responsible for raising finance for the deal.

Mr Moore said on Tuesday that Moses Obeid gave a handwritten list of bidders for the licences to Mr Brook and it was clear Moses “had information that was not publicly available”.

But the barrister acting for the Obeids, Robert Newlinds, SC, said there was “no evidence it was confidential”.

The hearing started on Monday and was slated to run for four weeks.