For a man who spearheaded his company's A$575 million (about HK$2.4 billion) investment in failed Australian telecommunications firm One.Tel, Lachlan Murdoch was remarkably relaxed about what was happening at the company. His involvement in One.Tel was detailed over three days before last week's legal inquiry into the collapse in Sydney. Mr Murdoch concedes his memory was 'inaccurate' in recalling trigger points for US$2 million bonuses for One.Tel's executive directors and that he did not question why the company changed its accounting practices in 1999. Even complaints about the company's disclosure from the corporate watchdog, the Australian Securities and Investments Commission, did not ruffle him. While his friend and fellow non-executive One.Tel director James Packer was receiving daily updates on One.Tel's cash position in its last days, Mr Murdoch admitted he was following the company through newspaper reports. Nor had it concerned him unduly when the value of News Corp's investment began to slide. He had accepted Mr Packer's assurances and those of One.Tel founder and chief Jodee Rich that these were temporary problems of 'timing' and the company's cash flow crisis could be turned around. So when One.Tel imploded at the end of May last year, Mr Murdoch says he had only been warned four weeks earlier that the company was in trouble. In Germany on business, he fielded a call on his mobile from Mr Packer and was told that One.Tel's cash projects were out by A$100 million or so. From there, the end came quickly. After Ernst & Young reported that One.Tel needed as much as A$370 million merely to keep going just for six more months, the Packer and Murdoch families - who controlled about 45 per cent of the company - pulled the plug and weeks later the company was in the hands of liquidators. After Mr Packer's earlier testimony, the young News Corp heir's appearance at the legal inquiry was the 'star turn' the Australian business media had been waiting for. Not only would it reveal how involved the Murdochs were in protecting their sizeable One.Tel investment but it was eagerly awaited as a significant test of Lachlan Murdoch's business mettle. On that score, and after his involvement in the hundreds of millions of dollars News Corp lost in the rugby league Superleague fiasco in the mid-1990s, the jury is still out. All agree that the young media heir was charming and well spoken in the witness box - he even stopped to help a television cameraman who had fallen over while pursuing him - but the consensus is that he showed more style than substance. And worryingly, his arm's-length involvement in a business venture which was to cost his shareholders more than A$500 million has raised significant questions about his rigour and attention to detail. When News Corp first made his investment in One.Tel, for example, Mr Murdoch told the inquiry he did not read all the legal documents himself, relying on his 'extensive legal counsel'. From a positive point of view, Mr Murdoch's distance from One.Tel's management is likely to save his company from litigation from One.Tel's creditors, who are owed about A$600 million. The One.Tel enquiry is attempting to discover which of the board members knew that the company was careering towards insolvency and if the company was trading while insolvent - a criminal offence in Australia for company directors who knowingly preside over such situations. Given that the Murdochs and the Packers have the deepest pockets of any of the One.Tel investors, their culpability or lack of it is of deep interest to the liquidators, and could also be to the investments commission if they believed the evidence warranted criminal charges. However, Mr Murdoch's testimony, and that of Mr Packer, is likely to disappoint on that score. It has consistently followed their line, first aired when One.Tel failed, that they had been 'profoundly misled' as to One.Tel's true financial position and only became aware of the real situation when it was too late. According to Mr Murdoch's testimony last week, he was supremely optimistic about One.Tel's future as late as March last year - less than two months before the company folded. Attending a One.Tel board meeting on March 30 of that year he had been impressed by a financial presentation from the company's founders and was confident the business could be turned around. 'We were very excited, I was very excited the business was on track. It was turning the corner,' Mr Murdoch told the inquiry. While the average market forecast was for a A$75 million cash balance at June 30 last year, One.Tel management were predicting they would have A$91 million in the bank. As they left the meeting, Mr Packer told Mr Murdoch that he was 'as confident as I was'. Mr Murdoch said: 'He said to me that these figures were excellent and that we would prove the market wrong. I said I certainly hoped he was right.' History has proved their optimism to be profoundly misplaced. Not only did both families lose an estimated A$950 million between them on One.Tel, but it has raised some searching questions about the suitability of the young heirs to lead their companies when their respective fathers depart the scene. James Packer, for his part, has always conceded he was a 'true believer' in One.Tel, blinded by the concept and by the smooth talking of the company's founder Mr Rich who became - for a time - his best friend. In comparison, News Corp chief operating officer Peter Macourt told the inquiry the company had always viewed One.Tel as a 'passive' investment, and that was borne out by Mr Murdoch's relaxed description of his hands-off approach to the telecoms firm. Legal action against News Corp from the liquidators is looking unlikely but Mr Murdoch's testimony did little to inform the business world about his suitability for the top job at one of the world's biggest media companies. In his recent book Rich Kids, Australian business author Paul Barry says neither James Packer and Lachlan Murdoch were the 'brightest crayons in the box' in their actions over One.Tel. It will be interesting to see if One.Tel was a one-off lapse, or is symptomatic of their business approach and management skill.