Scavenger's funding cancelled

Adelaide Bank has been asked to explain its dealings with controversial share dealer David Tweed, amid allegations the bank extended him a line of credit of up to $10 million.

At the bank's annual meeting on Friday, chairman Dick McKay was forced to defend the bank's dealings amid questions from shareholder activist Stephen Mayne.

Mayne said the bank, through fully owned subsidiary Leverage Equities, had offered a line of credit of up to $10 million to Tweed, a "notorious sharemarket scavenger who preys on shareholders to sell their shares for below market value". McKay confirmed there was a funding arrangement with Tweed but it had now ceased.

"When the organisation discovered what ... his underlying transactions were, he was very quickly invited to close his accounts," McKay said.

"Bear in mind, we can't discriminate who we deal with. We can't discriminate on moral grounds."

The Australian Securities and Investments Commission has warned against some offers made to shareholders by Tweed and his National Exchange Corp. For years, National Exchange, formerly known as Country Estate and Agency, has made money by writing to Australians and offering to buy their investments below market value.

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