EYE-BALL’s Human Evil Exposed – John O’Neill (CEO-ARU) … Part 4 – Macquarie Bank Report

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Human Evil Exposed –
John O’Neill (CEO-ARU) … Part 4

Link to all Posted Chapters for –

“Human Evil Exposed – John O’Neill (CEO-ARU)” – The SBS Story

The “Human Evil Exposed” – John O’Neill story link above takes you to a new page where all the chapters to this story are listed and linked.

All the documents that form a part of this story as evidence is linked here. These documents form the evidentiary trail collected as a part of the research undertaken during this project.

The “Human Evil Exposed” – John O’Neill story thus far covers events that took place between 1931 – 1995. The final ending is still to be played out. The motives for what took place in the late 70’s and early 80’s happened in 1931 when the then NSW Government owned – ‘Government Savings Bank of NSW’ was forced to close its doors. This set in motion a number of events that were not resolved until Dec 1987. The motives behind this story are steep in history and these grudges were held for a long time.

After they were finally settled – what then took place culminated in a $75 million FRAUD of public monies carried out by the NSW Government(NSWG) and its agent – The State Bank of NSW – (SBNSW) in 1988.

The players involved and connected with this FRAUD include:

  • Three consecutive NSW Premiers, Wran, Unsworth and Greiner,
  • Several Ministers serving in those Governments and their staffers – one of these Ministers is now a Justice with the NSW Land and Environment Court,
  • Regulatory Departments including the Department of Co-Operatives, Office of Business and Consumer Affairs, and the Australian Association of Permanent Building Societies, (AAPBS) and,
  • Employed State Bank of NSW Executives – the MD was John O’Neill – who all acted in proven ‘conflict of interest’ positions as Directors on the State Building Society Board, and whose intent was to facilitate a FRAUD against the 270,000 SBS members.

It’s a story that crushed the second largest NSW Building Society and at the time it had $1.6 billion in assets, some 270,000 Society members, and 650 SBS staff.

This is a story told by someone who lived through the 87-88 period and is told from his perspective and the evidentiary proof collected from research undertaken to prove the allegations. This story comes from a corrupted base of Corporate greed, corrupt and immoral Director’s, complicit Government representative’s, ego’s driven by historical flawed motive’s, financial market operative’s, drugs, sex, and the brazen Corporate RAPE and THEFT of the $75 million value attached to the State Building Society.

John O’Neill as the MD of the SBNSW destroyed a profitable and functioning Building Society because he could. It was done out of spite and revenge because he lost the 10 year plan to merge the SBS with the SBNSW. In the process he stripped the SBS of its corporate worth and broke all the Corporate and Regulatory rules in doing so. Rules that were put aside by the Administrators charged with the protection of the SBS members and their entitlements. He had help in the NSW Premier Nick Greiner who sanctioned O’Neill’s actions.

The story has many sub-plots and plots within those sub-plots – it is complicated, and to get a full appreciation of these complexities there is much reading to be done.

Please use the comments option below each post for any comments you might want to express – to ask any questions you want clarified – or if you want to make a private comment … please use the e-mail link here – blogcomment@bigpond.com – Enjoy the read …

The EYE-BALL Opinion … [ … where evil lurks – so do friends of the devil … ]

Definitions of Allegations alleged against Mr John O’Neill and his cohorts …

Linked: The Definition of EVIL:

  • morally wrong or bad; immoral; wicked: evil deeds; an evil life.
  • harmful; injurious: evil laws.
  • characterized or accompanied by misfortune or suffering; unfortunate; disastrous: to be fallen on evil days.
  • due to actual or imputed bad conduct or character: an evil reputation.
  • marked by anger, irritability, irascibility, etc.: He is known for his evil disposition.

Linked: Moral Bankruptcy:

  • Definition: the state of being devoid of morality and ethics, used esp. for business and political entities
  • Example: A complete lack of morals is moral bankruptcy.

Linked: Definition of RABID:

  • – irrationally extreme in opinion or practice:
  • – furious or raging; violently intense:
  • Synonyms – zealous, fervent, ardent, fanatical, bigoted.

Linked: Definition of FRAUD:

  • – deceit, trickery, sharp practice, or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.
  • – a particular instance of such deceit or trickery: mail fraud; election frauds.
  • any deception, trickery, or humbug: That diet book is a fraud and a waste of time.
  • a person who makes deceitful pretenses; sham; poseur.


Part 4 commences … The Macquarie Bank Report …

The time is now the end of March’ 88 – and the SBS Treasurer had just gone on Annual leave.  This was a well deserved break as the SBS Treasury operation had just pulled off the biggest market coup in a generation – it was a five month ‘sting’ and completed on the closeout date of the Sydney Futures Exchange Mar ’88 Ten year CGS Bond futures contract – the 15th Mar ’88.

The build up to this futures ‘close-out’ is the main story in the novel ‘Balls like an Elephant’ – this non-fiction novel is an integral part of the story and forms part of this Document upload process.   The money made by the SBS Treasury during the ’87 – ’88 year gave rise to everything else.  The SBS reserves grew from $39 million to $65 million during this period – total society assets grew from $1.1 billion to over $1.5 billion.   These numbers shamed the SBNSW growth and profitability numbers and as the SBS reserves grew – the SBNSW became more focused on using their fixed-capital control to extract the value of those reserves for their own gain.Bals Like an Elephant

“Balls like an Elephant” is available to read on-line in chapter order at this link:

The SBS March ’88 monthly profit was six times the best previous monthly result since the SBS Treasurer joined in Aug ’87.    The profits were so ‘in your face’ from the SBNSW perspective – John O’Neill at the SBNSW was throwing tantrums at the ‘crow’ the SBS GM – [Cleary] – and Chairman – [Dennewald] – were able to sing in the face of the SBNSW’s mounting losses.

O’Neill’s own SBNSW Treasury had floundered woefully in the aftermath of the Oct ’87 crash and Treasury staff defections.  They had appointed a new Treasurer in Mr Phil Gray – know as Mr Phil Gay to most market operatives before he changed his name.  Since Mr Gray’s appointment, the SBNSW Treasury had gone through a new ‘risk aversion’ implementation policy based on an initial review of the SBNSW Treasury operations by Mr Gray after his appointment.

Mr Gray was the former and well-respected Treasurer of Australian Bank prior to the SBNSW appointment – Australian Bank were known in the marketplace as the ‘Clayton’s Bank’ – the Bank that never took any risks – the Bank that played on the fringes of the market and never mixed it up when interest rates were on the move.   All this meant was that the SBNSW had hired a guy that knew how to contain ‘risk’ exposures – but in the SBNSW’s case  – it was possibly far too little and far too late.

In Dec ’87 the CSB handed over the final $200 million settlement to the SBNSW/NSWG and signed an agreement rescinding the 1931 Amalgamation Agreement.   This now gave O’Neill free rein to pursue his merge agenda with the SBS and convert them into the SBNSW’s Savings Bank arm.  This was the end-game plan that was set in place in the late 70’s and early 80’s.   There was only one problem – the then NSW Premier Unsworth had told O’Neill that he would not allow a merger between the two entities and this left a very pissed off O’Neill having to cool his heels.

O’Neill needed a friendly merger – research by the SBNSW had told them that the SBNSW was not popular with the SBS members – Whitlam had an appeal but when O’Neill took the reigns – public opinion and perception had changed and so it was with how the SBS members saw the SBNSW and O’Neill.

This could be attributed to the efforts of the SBS Management who themselves had adopted a resistance position in respect of the SBNSW merger agenda.  Since the O’Neill appointment,  the SBS GM – Denis Cleary – was not playing ball with the SBNSW.   Up until O’Neill’s appointment Cleary believed he would succeed Whitlam – and in that light – the SBS merger was part of Cleary’s arrangement for the top job.

Cleary was one of the 14 applicants for the SBNSW top job – yet O’Neill had come from nowhere to leap-frog all other applicants.  Cleary was pissed because he had been given an undertaking by Whitlam when he took the SBS gig in 1984 – that he would succeed him as the SBNSW MD.   Even during the interview process Cleary was given information that he was the front-runner – and then all that turned to crap when Little Johnny came from nowhere – all on the basis that he’ interviewed well’ according to his own words in an interview he gave shortly after his appointment – see Part 1 interview transcript here .

This set in train a series of SBS defence strategies orchestrated by the SBS Executive.  The first move was to get a SBNSW aligned Independent Director – Mr A Knowles – off the SBS Board via a ballot process at the Aug ’87 SBS AGM.   This succeeded with a former Tamworth Building and Investment Society (TBIS) Director – Bruce Treloar – agreeing to run for a DIrector position against Mr Knowles.  Mr Treloar won the position and that gave five (5) Director votes to the SBS against the SBNSW’s four (4).  The deciding vote was the Executive Director vote of the SBS GM – Denis Cleary.

For O’Neill’s merger agenda to gain any traction he first had to win back control of the SBS Board.   This was a simple strategy at face value – he could replace Cleary – the SBS GM – and thus remove the Executive Director vote,  and return the SBS Board to eight (8) members, of which the SBNSW had four appointees plus the SBNSW appointed Chairman’s deciding vote if needed.

To sack Cleary without cause would invite SBS members hostility – this was not wanted.  O’Neill’s strategy then became a course to create a ‘frame-up’ against Cleary and then dismiss him for ’cause’.   This was no simple process – the SBS had grown from a $1.1 billion Society to $1.5 in the 10 months to Mar ’88 – the SBS profits for the same period had been exceptional – in excess of $20 million against meagre $1-2 million profit announcements over the past 4-5 years.   The SBS members loved Cleary and his staff were all very loyal.    No – if O’Neill was to dismiss Cleary and stay in the merger game – it would have to be for good reason.

Since O’Neill’s appointment and lost control of the SBS Board – the SBS monthly Board meetings were becoming more hostile and agenda driven.   The SBS monthly profits pretty much gave Cleary bragging rights against anything O’Neill and his lieutenants raised.   During this phase O’Neill developed another problem – the  SBS Chairman Ken Dennewald was in the process of changing his allegiances even though he was a SBNSW appointee.

O’Neill could have fixed this at any time by replacing Dennewald with a new appointee.  Dennewald would have known this – and his mistrust of O’Neill since he took over from Whitlam was obvious.  This further undermined O’Neill’s creditability within the SBNSW senior Management.    O’Neill chose to delay the replacement of Dennewald until he had ’cause’ to dismiss Cleary and he had the vote of one of the Independent Directors in his pocket.   Getting rid of Cleary became O’Neill’s priority agenda.

O’Neill’s ‘friendly’ approach to the SBS Board about a possible merger between the SBNSW and SBS came at the January ’88 board meeting.    This was within weeks of the CSB settling the final $200 million owed under the appeals court judgement, and the 1931 Amalgamation Agreement had being rescinded.    The outcome from the Board meeting was the SBS commissioned a report from Macquarie Bank into the viability and options available to resolve the SBNSW ‘s investment in the SBS – and whether a merger arrangement between the SBNSW and the SBS would be mutually beneficial.

The Macquarie Bank Report (MBR):

This report was finalised in April ’88 and can be read in full using the following links:

It is important to highlight the ‘terms of reference’ this report was responding to …

Page 2 of MBR:


This preamble gave a clear indication that this report had no real recourse.  In essence the report was an opinion piece and carried no weight of responsibility or offered any summary opinion about what would be the best course for the SBNSW and its desires towards the SBS.   The report was based on outdated information and was ‘trash’ even before it was even published.   It is obvious that all the resource data and contributing comments came from the SBNSW – none of the SBS’s current year’s performance and profits were factored into the Report numbers.  As a creditable document – it had none within industry peers.

The only people it suited or served in any way were the SBNSW and NSWG as a paid for opinion that tried to ‘picture paint’ a belief that the SBS was not profitable, needed capital, and had no real prospect for growth.   As has been illustrated – all three of these criteria were misrepresented,  incorrect and outdated in the report.

This report has no validity – and as time passed and history explores the circumstances in which the report was used after its release – and in the context of how the report was used to aid in the FRAUD against the SBS members – it is clear to see that this report was the foundation from which the SBNSW and NSWG structured their FRAUD.

In a final humiliation arising from the NSW Premier’s actions – this report was used by Premier Greiner in a letter to Co-Operatives Minister Peacocke – in an urgent plea to allow the sale of SBS to St George Building Society to bypass the Takeover Review Committee.   See this letter and comments via this link:

When Premier Greiner stated in his letter –

“the proposed merger was one of the options considered and endorsed by the Macquarie Bank Report “

… Greiner overstated in the extreme the report’s findings, and never paid any attention to the Co-Operatives response, nor the SBS GM’s response to the MBR – nor to all the recommendations that any disposal of the SBS would best serve the SBS members if it was reviewed by the Legislative statutes dictating that any disposal be subject to the Takeover Review Committee.

Greiner’s letter to the Minister was a gross misrepresentation of facts – and as the Premier this should carry serious fallout.  Yet – Greiner has never been made accountable for his actions in this matter.

There can be only one conclusion to the reasons behind this massive Legislative oversight – the sale to St George was the result that best suited the SBNSW and NSWG given the plight of the existing SBNSW’s financial position.   Why wee the SBS members entitlements completely disregarded by the Legislative process?

What options were presented to the SBS members in allowing them to decide the fate of the SBS?

Why did the SBNSW and NSWG go out of their way to deny the SBS members their rightful entitlement in deciding alternative options – i.e.

  • buy back the $3.05 million fixed-capital out of SBS reserves – some $60 million being available,
  • to remain an independent Building Society severing all ties with the SBNSW,
  • to raise peer deemed capital requirements through a share issue to members – see Cleary’s MBR response
  • A ‘tender’ process for all interested parties … including
  • a merger with Newcastle or Illawarra Building Societies as recommended by the Co-Operatives review of the MBR …

Why was the only option pursued a sale of the SBNSW owned fixed-capital to St George Building Society for $70 million?  This price tag represented the value of SBS capital reserves and goodwill that the SBNSW and NSWG were willing to sell control via the ownership of the SBS fixed-capital.   What value did the SBS members get – remembering they had $1.5 billion in shareholder equity against the $3.05 million owned by the SBNSW?   And to understand that this was approved, sanctioned, sought and done with pressure bought to bear by the Premier to get it done as outlined  above.

In Law – this was a criminal action with deliberate criminal intent, and actioned under a known and exposed ‘conflict of Interest’ position – and as such all those responsible should have faced indictable charges.


MBR pages 38-45 … [these pages pretty much summarise the overview of the SBS and its future from the Macquarie Bank perspective. It is important to understand that this was all SBNSW agenda – the SBS had no want to be involved with any deal with the SBNSW and this report reflects the interests of the SBNSW and NSWG.]


The 8.1 clauses covering advantages and disadvantages the SBS and SBNSW share, only really talk about the SBNSW perspectives – and not the genuine interest or outcome for the SBS members.   Macquarie Bank did not even seek a legal opinion on what the ‘fixed-capital’ investment and ownership by the SBNSW in the SBS actually meant when it came making a decision in how to exit the SBS or who was in a position to decide on any merger agenda.

This very issue was exposed and proved to be very important when the Co-Operatives decided to challenge the SBNSW’s and NSWG’s position on the ‘Conflict of Interest’ issue.  The Co-Operatives stance proved correct and that made the options and opinions offered within the MBR all based on absolute fantasy.   This rendered the report as worthless as a reference opinion – and to make the SBS have to pay for this report  given that it was at the SBNSW’s insistence that it was commissioned – it is more famous by what it did not investigate.  The document is potentially libelous in that it mislead and misrepresented known facts to everybody who read it.

Given the nature of the Co-Operatives movement – this report was also highly insultive in that the SBS members were never considered  in the wash of options or opinions offered – their shareholdings of the SBS were never even rated within the Macquarie Bank staff who produced the report.



When this report was commissioned – and in the immediate aftermath of the October ’87 market crash, the State Bank’s of Victoria and South Australia were already rumoured to be exposed and having financial difficulty – rumours about the SBNSW were also circulating.

How could Macquarie Bank produce this report without doing any due diligence on the SBNSW financial position?   The report is littered with inaccuracies regarding the SBS’s performance numbers and the numbers used had not been updated since the May ’87 annual report.   This report is evidence of how one would go about getting an independent analysis with intent to use it to achieve a greater agenda.   There is no objectivity in this report other than what the SBNSW wanted included to serve its own purpose.




Once again – the data the Macquarie bank people were working on was outdated relative to where the SBS was Feb/Mar ’88 and at the time the report was being complied.




There is no doubt that the Agency agreement between the SBNSW and SBS was of great benefit to the SBS in its formative years after the amalgamations of the Tamworth and RSL Building Societies.   But some six years into operations – the SBS was relying less and less on SBNSW agency arrangements for deposit funds.   It was now a Society with over 250,000 member accounts – some $1.4 billion in assets and growing annually at above 40%.  The SBS’s profits in the current financial year – in excess of $20 million – had injected capital reserves that had reduced gearing ratios to the low 20’s – down from almost 30-1 12 months earlier.

Why Macquarie Bank were not provided with these updated numbers as part of their research parameters can only suggest that the SBNSW did not want them to have the numbers.   Once again that alludes to a ‘paid for’ report and a report that truly served only one master – that being the combined efforts of the SBNSW and NSWG.

The pages in between 2 and 38 of this report – give a wide scoping expose on Australian Banking, Taxation, Lender of Last Resort and other data that had no real meaning or bearing to the reports findings.   They had such a low-grade of relevance they are not worth commenting on.


The SBS and Co-Operatives Department MBR Responses:

Internally, the MBR was sent to the SBS and to the Co-Operatives Department – this was a highly confidential document as was not released to teh media until Jun ’88 – at a time when the SBNSW had made their move.   Their responses to this report can be read using the links provided below:

Page 1 of Denis Cleary’s Response:


Page 2 of Denis Cleary’s Response:


Page 3 of Denis Cleary’s Response:


Page 4 of Denis Cleary’s Response:


The Appendix data is included in the download link above and here –  WORDPDF:

The SBS response from Cleary is naturally defensive and gives a much truer perspective from the SBS’s position  on the MBR … and rightfully so.   The Appendix data included with the response counters anything the MBR tried to offer up.  Cleary’s comments are worth reading in full – they ask of and cause reason to try and understand why the SBNSW ignored this rebuttal submission.

Yet – and to be somewhat critical in a hindsight way, at this point Cleary and his Executive’s understanding of the legal ramifications of the ‘conflict of interest’  position was not appreciated.  Had the SBS sought independent legal opinion over the SBNSW’s ownership and entitlements attached to the SBS ‘fixed-capital’,  and the Board representation it represented, and how the formation structure of the SBS was arranged in circumvention of the newer 1967 Legislative Building Society Act – then a sterner defence of the SBS and its members might have been in the offering.    Perhaps this was not possible given the SBNSW’s involvement and how close they would be to any decision to seek Independent Legal advice – but if there was concern, and there should have been,  about the legal structure of the SBS – the SBS members would have been best served had such advice been sought regardless of the SBNSW’s attention.

At the time Cleary had control of the SBS Board – and perhaps his thinking was that control was absolute and assured – if so this was a serious over-estimation of his perspective of control of the SBS Board.

Cleary’s position at this time was also clouded by other issues when this report was released.  He was in a personal feud with John O’Neill over the SBNSW GM position that had been ongoing since July ’87.  Cleary’s intent now was to deny the SBS to O’Neill – he was caught up in his own revenge game and this proved to be a distraction to the defence of the SBS against the declared intentions of the SBNSW and NSWG once Greiner became Premier.   In addition, and in Part 5 of this expose – it will be revealed how Cleary had agreed to allow the SBNSW to send its own team to investigate the SBS Treasury and its profits and try to determine whether they were real – and if so how the profits were being made.   This investigation was happening at the same time that the MBR was released to the SBS.  Cleary had a lot on his plate – and he and his Executive team made some serious misjudgments and mistakes –  more on this in Part 5 …


MBR Response – Dept Co-Operatives:

The Co-Operatives response is more balanced – yet proposes something completely opposite to what the SBNSW had in mind – [see page 5] – please see copy below of final page – [page 6] – for Co-Operatives summary  perspective on MBR –

Page 6 – [final page] – of Co-Operatives MBR response:


These comments clearly indicate that a ‘tender’ process should not be denied the SBS members.


In fact – on page 5 of the same response [see below] – the Co-Operatives Minister and Registrar talk about ‘strong competition to St George and the Savings Banks.’ by such a merger.

Page 5 of Co-Operatives MBR response:


The Co-Operatives view that the SBS would make a perfect fit with the ‘Hunter’ – i.e. Newcastle Building Society and ‘Illawarra’ – i.e. Illawarra Building Society, would be a perfect fit – should have made the end-game sale of the SBS to St George worthy of an investigation as to why all protocols and advice by those in a position to best judge what is right for the SBS members – were ignored and denied.

The summary comment on the MBR was that it was largely laughed out-of-town, and discounted by everybody except the SBNSW and the NSWG.

In the ensuring months they would both use the MBR to further their claims on the SBS – and this should have been reason for the Co-Operatives Department to step up which they did in May ’88 – but by July ’88 all Government opposition had ceased and the SBS Executive had all be dismissed or sent on administrative leave.  The ‘tender process’ suggested by the Co-Operatives Dept was never offered to the SBS members.

Everybody just rolled over and allowed the SBS members and staff to get shafted … some 24 years later this expose hardly does justice to the corruption and fraud that occurred … as this story becomes more widely distributed – and the media begin to understand the complexities in what actually happened – perhaps some justice might be served upon those responsible.


Part 5 … continues … use link below …


Link to all previous chapters for –

“Human Evil Exposed – John O’Neill (CEO-ARU)” – The SBS Story


The EYE-BALL Opinion … Without Prejudice …

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