Greed triumphed over diligence when investors were promised unachievable returns by the now collapsed agribusiness group Great Southern, a court has heard.
One of Victoria's largest ever class actions has begun over the billion dollar Great Southern collapse, with more than 22,000 group members and individual plaintiffs part of the proceeding.
The case was about greed triumphing over diligence, Garry Bigmore QC for the investors told the Victorian Supreme Court in his opening statement on Monday.
"The Great Southern story is the familiar one of greed, forever increasing sales of agribusiness-managed investment products, triumphing over diligence in the transparent offering of fair investments," Mr Bigmore said.
"The reality here was that the forecast yields in the plantation schemes could never be achieved."
The case would focus on the period from 2004 to 2008, when numerous plantation, horticultural and cattle schemes were sold to investors for hundreds of millions of dollars, he said.
The 2004 and subsequent product disclosure statements (PDSs) did not reveal Great Southern's shortcomings in its early projects, Mr Bigmore said.
Management wanted to put a "positive spin" on the shortcomings, he said.
But Paul Santamaria SC, a barrister for former Great Southern executive director John Young, described the suggestion that greed had triumphed over due diligence as "nonsense".
He said the details of the schemes were spelled out in PDSs.
"Mr Young and those who were closely involved in the preparation of the PDSs will say that what the plaintiffs allege is misconceived and wrong, and that the PDS contained information which enabled them to make an informed decision about whether to invest in the forestry plantation industry," Mr Santamaria said.
"Investors who participated in the schemes did so with their eyes wide open."
The court should conclude that the due diligence procedures in place at Great Southern were "both rigorous and sophisticated and that they reflected a culture which recognised the care that surrounded the circumstances of offering an investment to retail clients", he said.
There are 12 defendants in the case, with more than 30 lawyers and barristers spread across three large tables.
The trial before Justice Clyde Croft is expected to run until March next year.
In the five years before its 2009 collapse, Great Southern raised $1.8 billion and managed 45 investment schemes on behalf of 43,000 investors.
Great Southern's forestry operations owned and leased about 240,000 hectares of land.
The company also owned more than 150,000 cattle across about 1.5 million hectares of owned and leased land.
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