The long-running battle between the ANZ Bank and Indian billionaires Pankaj and Radhika Oswal has been settled with the bank preparing to take a $145 million hit to walk away from the matter.
Simultaneously, the Oswals have settled their equally long-running dispute with the Australian Taxation Office over a tax bill estimated to be over $100 million.
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The full amount of the ANZ settlement is unknown but is believed to be in the ball park of $200 million.
The settlement resolves the $2.5 billion claim the Oswals made against the bank over the forced sale of their Burrup Fertilisers business in 2010.
A spokesman for the Oswals said the couple would now be leaving Australia after the court lifted departure prohibition orders linked to their tax issues.
'Very satisfied'
Regarding the ANZ settlement, the Oswals' spokesman said: "They're very satisfied with the settlement. They were very pleased to be able to put the facts before the court and they're pleased that it's over."
"They won't be staying in Australia. They are now planning their futures," he said.
"The $145 million does not reflect the size of the settlement but the Oswals are bound by confidentially to not disclose the details."
![Pankaj and Radhika Oswal were seeking $2.5 billion.](/web/20160922093126im_/http://www.smh.com.au/content/dam/images/g/k/t/p/z/2/image.related.articleLeadwide.620x349.grlpat.png/1474527164797.jpg)
The Oswals had accused ANZ and receivers at PPB of short-changing them during the sale of their stake in Burrup for around $US580 million ($758 million).
At the same time ANZ accused the Oswals of misappropriating $150 million to furnish their laving lifestyles with luxury cars, boats and a sprawling mansion in Perth that is now due to be demolished.
![Radhika and Pankaj Oswal and their children leaving court last month.](/web/20160922093126im_/http://www.smh.com.au/content/dam/images/g/q/u/o/0/6/image.related.articleLeadwide.620x349.grlpat.png/1474527164797.jpg)
ANZ and the Oswals will cover their own legal costs, which could extend to the tens of millions. A brief hearing will be held on Thursday morning to have the cases set aside.
ANZ announced the settlement this morning to the Australian Securities Exchange.
"The settlement, the terms of which are confidential, resolves the $2.5 billion claim made by the Oswals with ANZ having previously recovered all outstanding loans made from 2005 to the Burrup/Oswal groups totalling around $1.3 billon," the bank said in its statement.
"The net pre-tax impact of the settlement will be reflected in an additional provision charge of approximately $145 million to be taken at the Full Year 2016 results."
Allegations rejected
ANZ chief executive officer Shayne Elliott said: "ANZ does not accept many of the claims made in court and we completely reject the allegations made against our staff.
"However, we believe the settlement is the right decision for shareholders bearing in mind the residual risks in a case of this size and complexity," Mr Elliott said.
The spokesman for the Oswals said: "The Oswals find it curious that the ANZ rejects all the allegations yet is prepared to pay a significant sum to stop them."
The Oswals had accused ANZ staff of acting in a bigoted manner towards them, emphasising their background as Indian nationals.
They had also claimed ANZ's former chief risk officer Chris Page had used physical force by putting Mr Oswal in a headlock to force them to sign a guarantee over their shares that led to the forced sale of their stake.
ANZ chief legal counsel was also accused of telling Mrs Oswal she and her husband would go to jail and their children would be orphans if they did not sign the guarantee.
Mr Elliott told ANZ staff this morning that the bank had not settled because of the allegations made against bank executives by the Oswals.
"While embarrassing allegations are the inevitable rough and tumble of legal cases, in usual circumstances (including this case) these, and the negative headlines associated with them, are no reason to consider settlements," Mr Elliott told staff.
Unusual case
Mr Elliott described the case as being "far from usual" since the bank first lent money to the Burrup Group in 2005. ANZ's exposure peaked at $1.3 billion in debt, Mr Elliott said.
"You will all know from media coverage that our lending was based on forged documentation provided by the Oswal/Burrup Group," Mr Elliott said.
"This obviously sits with great difficulty at a bank with normally very well managed credit processes but there were also difficult judgment calls that had to be made in the complex recovery process in 2010 and 2011," Mr Elliott said.
Mr Elliott said ANZ had not decided to settle the case lightly.
"Court cases of course are notoriously risky even when you have a solid case," Mr Elliott said.
"In the end, we took the view that in these quite unusual and complex circumstances the residual risks for ANZ were too great in the Oswal case.
"Given this, the size of the claim and the potential for court interest to apply, the amounts were so large that we felt we could not expose our shareholders to that risk."