NEWS Ltd chief general counsel Ian Philip told the NSW Supreme Court he had concluded before the One.Tel board cancelled a $132 million rights issue on May 29, 2001, that News was not committed to contribute. One.Tel went into administration the same day.

Yesterday the court was shown a fax that Mr Philip sent on May 28, 2001, to Rupert Murdoch, executive chairman of News Ltd's parent company, News Corporation, which referred to the risk of One.Tel's insolvency.

"I think to be honest by this stage I had formed the view that we were no longer committed to the rights issue," Mr Philip said.

The basis for the view that News was no longer committed to the rights issue was "the misrepresentations about the financial position of the company that we had relied on in committing to the underwriting", Mr Philip said.

by Elisabeth Sexton (Google News)

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