Westpac (ASX:WBC) share price up despite potential $254 million loss

More than 100 alleged fraudulent transactions on the wall, take one down, pass it around…

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The Westpac Banking Corp (ASX: WBC) share price appears resolute despite the latest Forum Finance development.

Shares in Australia’s second largest bank finished today’s trading up 0.69% to $24.93.

Court documents bring Westpac into focus

Eyeballs were drawn to Westpac again following the bank’s latest court documents being obtained by media outlets.

According to The AFR, the big four constituent alleges more than 100 fraudulent transactions took place involving Forum entities over a period that extended beyond two years.

Specifically, Westpac alleges that hundreds of millions of dollars were siphoned through the bank to various interests owned by Bill Papas’ Forum Group.

These interests are believed to be sprawled across Australia, Greece, Britain, Germany, and the United Arab Emirates.

Purportedly, the ploy was used to fund a range of extravagancies for Papas. These allegedly include properties, racing cars, boats, jewellery, and Papas’ 94.4% stake in Greek football club, Xanthi FC.

The alleged scheme is believed to be constructed through the elaborate creation of fraudulent documents, illustrating a raft of clients for Papas’ companies.

Such clients apparently include Veolia, Scentre Group (ASX: SCG), Coles Group Ltd (ASX: COL), and Catholic Healthcare among others.

In total, Westpac deems the loss to be $253.8 million. However, this doesn’t take into consideration other transactions through Westpac New Zealand.

Westpac share price snapshot

The Westpac share price has delivered a tantalising 37% to investors in the past 12 months. However, the bank has been suffering a weakening in its share price since late June.

About that time, Bell Potter downgraded Westpac shares to a hold rating. Although, on the positive side, the broker improved its Westpac share price target to $26.50.

Currently, the bank trades on a price-to-earnings (P/E) ratio of 22.15. The industry average P/E ratio is 15.5 times.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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