By James Atkinson

Allegations by publicans that Bankwest forced their businesses into receivership despite them claiming they never missed any interest payments have confounded Federal Senators John Williams and Doug Cameron, both have admitted.

A short time ago, Williams and Cameron questioned Geoffrey Reiher, a career hotelier, who was giving testimony at the Senate inquiry into the banking sector, currently underway in Sydney.

Reiher and partner Paul French took a $1.35 million loan with Bankwest to purchase the freehold of the Grand Hotel in Cobar, central western New South Wales.

Reiher – whose testimony followed Wednesday's explosive allegations by fellow publican Sean Butler – reiterated his claim that when receivers Ferrier Hodgson were called in to take control of the pub, he and French had not defaulted on their loan.

"Our arrears on interest payments when the receivers were sent in was $368," he said.

Reiher further claimed that when Ferrier Hodgson took control of the hotel, the receiver was surprised to find it had no major debts.

"I'll ask Bankwest this afternoon, why did you sell businesses up that had never missed a payment to you?" Senator Williams said to Reiher.

"There's got to be a reason why people like yourself have sold up when you haven't defaulted."

Reiher responded: "I've been asking myself the same question for a year or so."

"The other question is, is it good business to throw $2 million down the drain to clean up a good business that's paying its way?" Reiher asked.

"That's ultimately what it cost Bankwest to get rid of us."

Senator Williams said he was "gobsmacked at why you'd be sold up if you were meeting your commitments".

"Why would I cut off a customer I'm making money out of?"

Publicans did default on loan: Bankwest

In a statement to TheShout, a Bankwest spokesperson rejected outright Reiher's assertion that he and French had not defaulted on their loan.

"The Bank worked with this customer for over 18 months and agreed to a significant extension of an interest only period, however defaults occurred and despite the Bank’s efforts to assist the customer their financial matters could not be resolved," the spokesperson said.

"The Bank suffered a significant loss and as this is an ongoing legal matter it would be inappropriate to comment further."

Bankwest the butt of Senator's jokes

Senator Doug Cameron said he was "equally bemused" by Bankwest's alleged actions.

In a humorous interlude, Cameron noted that Bankwest had earlier this year appointed Susan Tindal as "chief executive for strategy and reputation".

"Why would Bankwest… need a 'reputation executive'?" Cameron asked Reiher.

Reiher responded: "I think they probably do need one after what they've done to us."

"That's probably one good decision Bankwest have made, do you reckon?" Cameron joked.

Reiher claims he was bankrupted after the receivers sold the pub for just $700,000 – little more than the value of the nine poker machine entitlements that were included with the asset – leaving a $650,000 shortfall on his and French's loan with the bank.

The Senate hearings continue this afternoon.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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