Former Allco Finance Group deputy chairman Bob Mansfield said yesterday that he could not recollect aspects of a contract for a $50 million loan to a related party that resulted in Allco having weakened security on the loan.Mansfield, who also chaired the related party committee of the Allco board, said the board was unhappy about having to make the loan to the Allco Principals Trust but felt that stabilising APT was important for the whole Allco group. Mansfield was being examined in the Federal Court in Sydney by counsel for Ferrier Hodgson, the liquidator of Allco Finance Group.Allco Principals Trust held investments on behalf of Allco executives. Its holdings, which were geared, included a substantial holding in Allco Finance Group.APT was faced with margin calls late in 2007 as the value of AFG shares fell.At the time Allco was negotiating the purchase of the property funds management group Rubicon and was arranging an initial public offering of a fund on the Singapore Stock Exchange.Mansfield said the board's view was that support for APT would help maintain the market confidence in Allco and its strategy. He said the board was sensitive to the risk that controversy over the Rubicon acquisition and concerns about the company's performance would put the share price under more pressure. Deputy managing director Michael Stefanovski had sent an email to senior executives and directors warning of a "perfect storm" looming.Mansfield acted as chairman during discussion of the APT loan because the group's executive chairman, David Coe, was an investor in APT and had a conflict of interest.In the end the loan was structured on terms that were favourable to APT. The original intention was to lend for four months but the loan that was executed was for 12 months.Security given by APT was in the form of a negative pledge - an undertaking not to take on additional borrowing or otherwise deal with its assets without consulting Allco.APT held assets that were being used to seed the fund that was to be listed in Singapore. Mansfield said he assumed that proceeds from the Singapore IPO would be used to repay the loan.He said he was not aware that in the final loan contract APT was relieved of the obligation to repay the loan upon a successful IPO.He said there was no fallback position if, as happened, the Singapore IPO did not go ahead.Mansfield was also unaware that the entity within the APT structure that held the income-generating assets that were earmarked for the Singapore fund was specifically exempted from the negative pledge conditions of the contract. He agreed that Allco did not get the negative pledge protection it was expecting and said he did not recall these changes to the contract being drawn to his attention.Mansfield said that as a non-executive director he took the view that the group made loans regularly and the executives were "well versed" in getting the best form of security.