A second former Allco Finance Group non-executive director has given evidence in as many days that management of the failed company had advised the board that a controversial loan to a satellite fund was secured, when the loan contract showed security was no more than a "featherweight" negative pledge arrangement.Neil Lewis, who joined the Allco board as a non-executive director in 2006, said in a Federal Court hearing yesterday that he had not seen a loan agreement between Allco Finance Group and Allco Principals Trust, which was executed in December 2007, and had relied on advice from management that the $50 million loan was secured.Misunderstandings in communication between the management of Allco, which went into receivership in November 2008, and its non-executive directors has been the dominant theme of an examination of the company's executives and directors by Allco receiver Ferrier Hodgson.On Wednesday Allco former deputy chairman Bob Mansfield said the company did not get the protection the board was expecting with the APT loan and said he did not recall critical changes to the contract being drawn to his attention.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. A $50 million loan was arranged to help APT deal with its margin calls.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. A sense of crisis was overtaking the company during this period. A report to the board from the chief financial officer in November 2007 indicated that profit would fall from $201 million reported in 2006/07 to somewhere between $148 and $178 million for the 2007/08 year. The analysts' consensus estimate was for a profit of $265 million.The $50 million loan to bail out APT was executed in December 2007. Lewis said he did not recall seeing the loan agreement and, while he accepted the loan was necessary to stabilise the group, he only understood the contract "in broad terms".Mansfield said the board's view was that support for APT would help maintain the market's confidence in Allco and its strategy. Security given by APT for the loan 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