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Rich-list tycoons accused of fraud and shocking vilification

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Rich-list tycoons behind a vocational training empire that collapsed after receiving $100 million in government funding have been implicated in alleged fraud, predatory conduct towards vulnerable students and shocking vilification of business associates.

The claims of widespread malfeasance at Australian Careers Network have been laid bare during an extraordinary defamation trial in the Supreme Court of Victoria that was launched by ACN co-founder Atkinson Prakash Charan against the publisher of The Australian newspaper.

Mr Charan is a former Qantas baggage handler who joined forces with ex-policeman Ivan Brown and invested their last $500 to register their first vocational training business in 2012.

Just two years later, they joined the ranks of the BRW Young Rich List in 2014 with a stake in an estimated $177 million fortune when ACN was listed on the Australian Stock Exchange.

ACN was placed into voluntary administration last March after the federal government froze more than $40 million in payments under the VET FEE-HELP loans program.

The company is the subject of an ongoing fraud investigation by the federal Department of Education and Training. 

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Over the past two weeks, hundreds of private emails between ACN management and senior staff have been presented in court by lawyers for Nationwide News Pty Ltd, the publisher of The Australian

The emails include references to "Jew-proofing" a business agreement and calling the boss of a not-for-profit organisation a "man-hating whore".

Mr Charan has told the court he has almost no recollection of the correspondence and has been unable to explain most of the content during cross-examination.

Justice Jack Forrest has warned Mr Charan he has concerns about his evidence.

An email sent just six months before Mr Brown floated ACN, refers to an alleged attempt to mislead the stock exchange.

"Between you, me and David we are gonna backdate July income to June to pump up 2014 financial year income ... We have to. This is do or die now," said a May 2014 email attributed to ACN co-founder and chief executive Mr Brown.

Mr Charan, who walked away from the float with $36.5 million, responded: "Just let me know what to do from my side and I will get it done."

Other communication between Mr Brown and Mr Charan reveals intense pressure placed on business development managers to enrol new students to secure more government funding.

ACN was accused in court of employing a team of contractors, known as "scribes", who allegedly falsified enrolment documents for students who never completed courses.

Fairfax Media has previously revealed recruiters targeted vulnerable, non English-speaking and in some cases disabled people who often never even attended the courses.  

Those who raised probity concerns or failed to recognise the importance of the impending ASX listing were branded a "c--t", "faggot" or a "f--kwit", according to emails tendered in court.

In an email from August 27, 2014, Mr Brown called the chief executive of Scope Victoria a "man-hating whore", when the not-for-profit organisation decided not to refer potential students to his training colleges.

In another missive on July 29, 2014, the former policeman launched a tirade about a senior figure at Melbourne United Basketball Club.

The club had agreed to refer people from its database to a course on diabetes management offered by one of Mr Brown's training organisations.

"Just remember ... Jew-proof [the agreement] or they will rape our ass," Mr Brown said.

A day later Mr Charan responded: "This is how you negotiate!!! Watch how bad he will buckle and bend over forward for an anal rappage [sic]."

Over the past fortnight in court, Mr Charan has dismissed the profanity-laced emails as "banter" between colleagues that was never intended to be made public.

Mr Charan told the Supreme Court that his reputation had been seriously damaged by a story in The Australian in November 2015. He claims the article incorrectly suggested he was at the helm of ACN when the Australian Competition and Consumer Commission announced court action against one of its training colleges, Phoenix Institute.

Mr Charan insists he was only involved in a sales and marketing role at an affiliated company called Community Training Initiatives and was a "passive shareholder" in ACN.

The Australian was accused of  "despicable conduct" by Mr Charan's barrister, Georgina Schoff, QC, who said the trial would give her client the opportunity to defend his reputation and "nail the lies".

But over seven days of cross-examination, Mr Charan has been forced to address emails that allegedly link him to almost every facet of the scandal-plagued business. 

He told the court he believed some of the emails had been tampered with or falsified.

In a bizarre exchange, Mr Charan denied talking to Mr Brown in the weeks before the trial then refused to hand over his phone until ordered to do so by Justice Forrest.

Subpoenaed phone records later presented to the court revealed he had spoken with his former business partner on at least nine occasions, for almost four hours in total, over that period.

Barrister Dr Matthew Collins, QC, representing Nationwide News, repeatedly accused Mr Charan of giving false or misleading evidence while under oath. 

Mr Charan's frequent memory lapses eventually prompted a warning from Justice Forrest.

"What troubles me is Mr Charan says he can't recall a conversation a week ago, whether it was one minute or 27 minutes in length. The problem with it is what I do with this evidence after at some point of time. It is concerning and I would be less than candid with counsel if I didn't mention that I'm concerned about it," the judge said.

The exact status of Mr Brown's relationship with Mr Charan is not known, despite the recent communication.

In May 2014, the former friends had a bitter feud over claims Mr Brown had established a rival business behind Mr Charan's back.

"I would rather cease the IPO process than work with a slimy rat in our ranks," Mr Charan said in an email.

Mr Charan told the court it was the "biggest sin" a business partner could make.

In another email from February 2015, Mr Brown appears to threaten his former mate after a staff member was suspected of blowing the whistle to government regulators and the media. 

"And your fingerprints are all over everything. Be sure to know that if he causes me grief, then it will end up causing u grief too," Mr Brown said in an email submitted as evidence. 

The trial continues on Tuesday.