The prospect of criminal charges against one or more former senior executives from collapsed Melbourne satellite company NewSat has increased after a US government bank handed damning documents to corporate watchdog ASIC and Washington lawyers.
America's EXIM bank has lost $130 million by backing NewSat's failed dream of launching a satellite. The NewSat debacle caused the US Congress to stop funding the EXIM bank last year.
A report by the bank's inspector general found NewSat management allegedly misled the company's main lender by failing to disclose the true state of its finances and hiding a host of suspect payments to NewSat founder and ex-chief executive Adrian Ballintine's yacht business.
Documents to support these findings have been referred to ASIC and the general counsel for the Washington bank to support "civil or criminal remedies", the inspector general's report reveals.
The report noted Mr Ballintine's failure to co-operate with investigators and found he had effective control of NewSat's board.
BusinessDay has previously revealed how many of NewSat's directors were also shareholders in Mr Ballintine's Cresta Motor Yachts.
The inspector general's report said: "The investigation highlighted and confirmed the following key areas of concern: use of non-independent directors, inappropriate related party transactions, and use of funds for personal expenses by the CEO. For example, related party transactions between NewSat and Cresta Motor Yachts for over $300,000 in 'executive marketing and business development' for the satellite project."
The report was also critical of the EXIM bank's supervision and due diligence regarding NewSat.
Mr Ballintine has blamed the US bank for the company's woes and big shareholder losses.
Aggrieved shareholders hope to launch a class action to recover some money.