Archive for May, 2019

May 9 2019

Nathan Tinkler’s shrinking empire

Nathan Tinkler’s once billion-dollar mining empire continues to disappear. His former backer, Raymond Zage, is already aggressively seeking to recover what he can from the husk and now another of Tinkler’s former partners is following suit.

A Hong Kong-based trustee company has put a receiver into Tinkler’s base metals operations, Aston Metals – the largest remaining mining asset in Tinkler’s private group.

According to Tinkler, Aston Metals has been a ”dormant, speculative investment near Mount Isa by the Tinkler Group and other shareholders”. (This is a project that at one time Tinkler thought could be worth $75 million, according to media reports.)

”Our main joint-venture partner, Orchard Capital Partners in Hong Kong, is experiencing financial difficulties in one of its funds and as a result took the unexpected decision to place Aston Metals into receivership.”

But there seems to be some dispute over which party is under most intense financial pressure.

Late on Tuesday Orchard Capital hit back at Tinkler saying in a statement: ”Aston Metals and Mr Tinkler have received a number of notices over the previous 30 days requesting payment of the debt as per the rights of the secured creditor. This would not be a surprise for Aston Metals or Mr Tinkler.”

It appears Orchard Partners is not part of Farallon, nor is the trustee company, Madison Pacific Trust, which is representing it.

It previously has been reported that Farallon was a lender to Aston Metals. This was not denied.

This fresh bout of Tinkler attention comes amid recent suggestions that he was thinking of a corporate comeback, or at least coming out of his self-imposed exile in Singapore. The chatter that Tinkler could re-emerge on the Australian corporate stage is certainly being hosed down by his media adviser.

Conventional wisdom in the business community says Tinkler is financially washed up. But in a March liquidator’s examination Tinkler told the court the Tinkler Group Family Trust had assets worth up to $1.4 billion.

Farallon seized control in June of Tinkler’s primary asset, a 19 per cent stake in Whitehaven Coal – cystallising a loss on a $US634 million loan to the Newcastle entrepreneur.

It’s now about picking over the scraps of Tinkler’s remaining assets, the value of which is debatable but could potentially be as much as $50 million – that’s considered a glass-half-full valuation.

John Park and Quentin Olde of FTI Consulting were appointed receivers and managers to the Aston Metals Group on Tuesday, a situation that Tinkler’s Australian spokesman was not aware of.

The receivers were appointed by Madison Pacific Trust in its capacity as Security Trustee over all the secured property of Aston Metals Ltd, a fully owned subsidiary of Aston Copper Pty Ltd and its subsidiary Aston Metals (Qld) Ltd.

Aston Metals is a base metals explorer with tenement holdings in the Mount Isa region of north-west Queensland. Aston Metals has five projects: at Walford Creek, Constance Range, Isa North, Isa West and Isa South.

Isa North, Isa West and Constance Range are joint ventures with listed mining hopeful Summit Resources. In Summit’s most recent quarterly report it said the Isa North tenement soil surveys produced only ”a low-level copper anomaly”.

Isa South is a joint venture between Aston Metals, an unlisted company, Redmetals, and Xstrata but it had not yet been the subject of any exploration.

The highest value Aston Metals’ projects seems to be Walford Creek, which underwent successful drilling campaigns a few years ago but is still considered to be fairly low grade and the subject of development opposition from the indigenous community.

That the lender has taken security over Aston Metals is evidence that there is some value in the asset. The receiver will now start the process of looking for a buyer.

Tinkler’s ability to stay just out of reach of personal creditors attempting to bankrupt him has become almost as legendary as his ascendancy to billionaire status by the age of 35.

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May 9 2019

Gippsland collapse hits community

Community leaders in the Victorian town of Bairnsdale have expressed doubt about the region’s financial future after rural lender Gippsland Secured Investments was placed into receivership, leaving $143 million in local savings at risk.

The collapse of the non-bank lender, which froze investor funds last month, comes as a fresh blow to Victorian investors after the collapse of non-bank lender Banksia Securities last year.

The folding of GSI follows a drawn-out battle in the Federal Court to try to save the company by a group of local investors who had pledged $2.2 million to a rescue package. The bailout proposal was thrown out on Monday.

Gippsland cattle farmer Lea Worseldine said she had a ”substantial” amount of money tied up in GSI which she was anxious about losing. She started farming with her husband Barry through a loan from Banksia Securities 33 years ago and had lost a small amount when it collapsed.

”The repercussions for the township are going to be horrendous. If we get 85¢ back [on the dollar], I guess that’s better than nothing. We could use the money though,” she said.

On Tuesday, trustee the Trust Company appointed Ernst & Young partners Adam Nikitins and Simon Cathro as receivers of the company.

David Grbin, an executive at the Trust Company, said a cursory examination of the company’s books revealed mismanagement before its collapse.

”The evidence to date points to management shortcomings that led to a deficiency of tangible assets to meet GSI’s obligations to note holders,” he said.

He said the decision to appoint receivers came after an ”exhaustive examination” of other options.

East Gippsland mayor Dick Ellis said the council had enlisted several non-government groups including Anglicare and the Salvation Army to make assistance packages available to members of the community who were severely affected by the collapse.

The decision by Justice Kathleen Farrell in the NSW Federal Court on Monday ends a lengthy application by a rescue group to try to pull GSI from the brink of insolvency by recapitalising and avoiding receivership.

Justice Farrell said it was with ”great regret” that she rejected the rescue group’s proposal, which involved funding from a consortium of local business figures, including former ANZ director John Dahlsen.

Mr Dahlsen said on Tuesday that the collapse of GSI would have a dramatic effect on the region’s economy.

”We’re going to lose a company that’s been bankrolling a number of local investments and local projects in the area that the big banks wouldn’t touch,” he said.

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May 9 2019

Housing lifts but economy subdued

Australia’s economy is continuing to grow, albeit at a slow pace, just days out from the federal election.

But economists warn that the much-needed rebalancing of economic activity away from the mining sector towards non-mining parts of the economy remains ”just a forecast”, with few signs of life outside the housing sector.

The Reserve Bank of Australia kept the official interest rate at 2.5 per cent on Tuesday, the lowest since the 1950s, admitting that the economy had been growing ”a bit below trend” for the past 12 months.

Economic activity was likely to remain subdued in the near-term, despite a 15 per cent fall in the value of Australia’s dollar since early April.

”[But] it is possible that the exchange rate will depreciate further over time, which would help to foster a rebalancing of growth in the economy,” RBA governor Glenn Stevens said.

It came on the same day as the Bureau of Statistics released figures showing retail sales grew just 0.1 per cent in July, seasonally adjusted, after sales in our big department stores fell nearly 8 per cent.

This followed months of flat or negative sales growth, and meant annual growth in July was just 1.9 per cent – well below the inflation rate of 2.4 per cent. Economists said this showed the much-touted rebalancing of the economy was still a long way off.

”The retail numbers weren’t particularly impressive, and in terms of the rebalancing of the economy that we’ve been expecting we’re really only seeing it in the housing market, it hasn’t broadened beyond housing,” HSBC Australia chief economist Paul Bloxham said. ”We’re still expecting it to come, but that broader rebalancing is still a forecast, rather than a reality.”

The continuing weakness in retail sales has added to the case that the RBA might have to cut rates again this year, National Australia Bank economist Spiros Papadopoulos said. ”Rising unemployment in an economy growing below 3 per cent will continue to weigh on consumers’ minds and it will be some time before we see retail spending and consumption growing strongly again,” Mr Papadopoulos said.

New data showed the current account deficit, which shows the extent to which we call on the savings of foreigners to fund the part of our nation’s investment spending that we’re unable to fund from our own saving, increased in the three months to June by $610 million, or 7 per cent, to $9.35 billion.

But economists said the number was better than it looked, because the current account is broadly improving.

”We’re seeing a narrowing in the current account in a trend sense,” Mr Bloxham said. ”And I’d expect that trend to continue. We’re going to get support from exports of commodities and a slowdown in imports because the mining investment boom is peaking, so that combination should see an improvement in our trade position over time,” he said.

Gross domestic product data will be released on Wednesday for the three months to June. Economists are broadly expecting annual growth for the economy to be around 2.5 per cent.

”Our expectation for Wednesday’s second-quarter GDP is a rise of 0.6 per cent, giving an unchanged annual rate of 2.5 per cent, barring revisions,” Commonwealth Bank economist Michael Workman said.

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May 9 2019

APRA handballs privacy concern

The financial regulator has brushed aside recommendations from a federal agency that it remind banks of their privacy obligations when lenders are sending customers’ personal data overseas.

In a guidance note this week, the Australian Prudential Regulation Authority urged companies to take a ”cautious and measured” approach to managing data when offshoring.

But it did not follow a recommendation from the Australian Privacy Commissioner, Timothy Pilgrim, to draw banks’ attention to their obligations under the Privacy Act.

After a wave of offshoring in financial services, privacy has emerged as a key flashpoint, causing some state government agencies to restrict what information can be stored overseas.

In a submission to APRA, Mr Pilgrim recommended the regulator refer to the National Privacy Principles – federal rules that restrict how big businesses handle personal information.

The principles require companies to follow domestic rules when they transfer data overseas, and serious breaches can result in multimillion-dollar fines.

But APRA’s guidance note to banks – which is intended to identify potential problem areas – did not mention either ”privacy” nor ”personal information.” Instead, it focused on potential risks to the financial system from data management.

”APRA expects a regulated entity to apply a cautious and measured approach when considering retaining data outside the jurisdiction it pertains to,” its guidance said.

”It is important that a regulated entity is fully aware of the risks involved and makes a conscious and informed decision as to whether the additional risks are within its risk appetite.”

Customer privacy is a growing concern of unions and some government departments as companies including ANZ, QBE and Westpac send thousands of back-office jobs overseas.

For instance, Victoria’s WorkSafe agency does not allow insurance providers to store data relating to employers or injured workers outside Australia.

Finance is the most complained about sector, according to the 2011-12 Australian Information Commissioner annual report, and Commonwealth Bank, ANZ and Westpac were among the 10 most complained about organisations.

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May 9 2019

Heat on Greenberg

Pressure: Todd Greenberg (right) is in the spotlight. Photo: Wolter PeetersBen Barba’s partner Ainslie Currie has not yet been contacted by the leading barrister heading up the inquiry into Canterbury’s handling of domestic assault allegations against the star fullback, in an indication the investigation’s main focus is the game’s integrity rather than the incident itself.

With former Bulldogs chief executive Todd Greenberg now employed as one of the NRL’s leading officials, Tony Bannon, SC, has been engaged at a cost of about $8000 a day to investigate whether the allegations were covered up at the time he was in charge of the Bulldogs.

By appointing Bannon, the NRL has shown how seriously it is treating the matter, which is widely considered to be the biggest test of the game’s integrity since the formation of the ARL Commission 18 months ago.

Greenberg, Canterbury chairman Ray Dib and coach Des Hasler are expected to be interviewed, possibly on Wednesday, with Fairfax Media told the investigation will take days rather than weeks.

Currie’s lawyer Campbell MacCallum said his client, who has maintained she has never been the victim of domestic abuse, had not been contacted for an interview. ”No approach has been made to myself from Tony Bannon about Ms Currie speaking to the investigation committee,” MacCallum said.

Greenberg is continuing in his role with the NRL while the inquiry takes place and he is due to front a press conference on Wednesday to announce details of the pre-season Nines tournament in Auckland in February.

”Until the matter is resolved I will not be making any comment,” Greenberg said on Tuesday.

Greenberg is understood to be confident he and the Bulldogs will be cleared of wrongdoing as they urged Currie to go to the police if she had been assaulted, but her concern was for Barba.

However, his new role has placed the NRL under enormous pressure to ensure the integrity of the game is protected.

”If they are serious about protecting the integrity of the game then no one is above reproach,” one official said.

While some at the Bulldogs have privately questioned why the club is in the spotlight, the overwhelming view in the game is Greenberg’s standing as one of the NRL’s top three officials has been compromised if the allegations are proven.

”How can he impose fines and sanctions on clubs if he has been involved in covering this up?” one club boss said. Fairfax Media was told Greenberg will have a case to answer if he was aware, or should have been aware, of a possible incident of domestic violence and did not report it to the police or NRL.

Greenberg and Dib met NRL chief executive Dave Smith the day after Currie approached the club on February 24 to advise him Barba was being stood down for personal issues, but they did not mention any allegations of domestic abuse.

NRL officials said they became aware of the allegations only after the publication of a photo last Sunday showing Currie with a bloodied lip.

However, the existence of the photo has been rumoured for some time and Greenberg is believed to have been told about it but had not seen it.

It has been suggested Greenberg could have informed Smith about the allegations when he accepted the job with the NRL in June but Fairfax Media was told the club felt he had handled the situation appropriately.

With Currie denying she had been assaulted, it is understood Greenberg felt that was the end of the matter. Fairfax Media was also told there were concerns within the Bulldogs that if they had advised the NRL of any concerns the allegations would have leaked out and found their way into the media.

The club was also worried about Barba’s welfare. Barba was booked into a north shore clinic for 17 days before being released after doctors advised that spending any longer there would not help him. However, Fairfax Media was told that if the club was worried about Barba’s mental state and held any suspicion that Currie had been assaulted, they should have also been concerned it could happen again.

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