Malcolm Turnbull says he gave $6 million to his children to manage a loan for shares in a Sydney fund manager to simplify his investment portfolio and reduce conflicts of interests before becoming prime minister.
Mr Turnbull told the NSW Supreme Court on Tuesday he valued “transparency and accountability” and that’s why he “gifted” the money to his children to take over a loan for shares given to longstanding family friend and Pengana chief executive Russel Pillemer in 2008.
The lawsuit over whether Mr Pillemer later misled and deceived the Turnbulls which caused them to lose money has also raised allegations about Mr Turnbull’s son, Alex Turnbull, who has been accused of telling a “pack of lies” to suit his interests and “warehousing” his father’s shares.
Former prime minister Malcolm Turnbull has been forced to defend his decision to “gift” $6 million to his adult children.Credit:Wolter Peeters
When asked why Mr Turnbull gave his children the money, he responded: “They did not have to reach into their own pocket to pay for the loan, they were given a gift by their parents. Parents often give gifts to their children.”
Lawyers for Mr Pillemer said Mr Turnbull’s political dealings were not a focus of the case, but that “gifting” the money to his children allowed him to avoid having to report his exposure to Pengana on public registers and reduced scrutiny from the federal opposition and financial press.
“Rightly or wrongly, fairly or unfairly, there is a problem being a minister of the Crown, on the one hand, and at the same time having exposure to investments which might be affected by political decisions,” Robert Newlinds SC said.
Mr Turnbull said conflicts of interest are “managed all the time” and his son was better able to control parts of his investment portfolio because he had more time and worked in the financial services industry. “As a minister in the government, you are very busy, you simply do not have the time to manage your own investments,” he said. “I am very committed to disclosure and transparency. That’s why I did not use a blind trust.”
At the heart of the case is whether the company Maurtray, owned by Alex Turnbull and his sister Daisy Turnbull, unfairly lost money by accepting cash for repayment of the 2008 loan rather than taking Pengana shares and selling them on the market for a higher price.
Alex Turnbull claims he was not made aware of Pengana’s plans to merge with Hunter Hall in 2017, which significantly pushed up the stock value of the group, and is now suing for damages of up to $12 million.
