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The corporate regulator has raised concerns about KordaMentha's independence ahead of its appointment as administrator to Network Ten, at a hearing in the Federal Court on Monday.
The hearing was called by KordaMentha to apply for an extension of the administration period, an uncontroversial move that is likely to be granted.
Network Ten enters into receivership
PPP Advisory will now look to sell Network Ten, with Lachlan Murdoch and Bruce Gordon looking to purchase the network once media laws are changed by the government. Vision courtesy: ABC News 24.
However, lawyers for the Australian Securities and Investments Commission (ASIC) also joined proceedings to raise concerns about a "reasonable apprehension of bias" that KordaMentha might have because of "the work that's been done by KordaMentha prior to their appointment".
In particular, the "circumstances of the engagement and the nature of the work done and the way that it is done", barrister Stewart Maiden said.
However, an affidavit filed on Monday morning ahead of the hearing before judge David O'Callaghan in the Federal Court in Melbourne has slowed down ASIC's manoeuvre.
The affidavit relates to communications between billionaire shareholder Bruce Gordon's adviser and lawyer, John Atanaskovic, and KordaMentha's lawyers,  Arnold Bloch Liebler.
Leon Zwier, from Arnold Bloch Liebler, argued KordaMentha's involvement with Ten from February was prudent and there were multiple advisers involved.
Network Ten went into voluntary administration last month after its billionaire shareholders told it they would no longer guarantee a key loan. It appointed KordaMentha as voluntary administrator of the company and its subsidiaries.
The hearing continues this afternoon.