Crikey



When Tinkler plays politics, ICAC has some tough questions

It’s astounding that former billionaire Nathan Tinkler has wound up at the centre of an Independent Commission Against Corruption investigation into donations to the Liberal Party.

The controversy surrounds his attempt to get approval for a massive new coal loader to be built on the former BHP steelworks site at Mayfield in Newcastle. A lot of lobbying was necessary, because the loader idea was never going to stand up on its merits; it went against a decade of planning underway since the Mayfield site was vacated by BHP in 1999.

The site was zoned for a mix of light industrial and commercial uses. The company proposing the coal loader was Buildev, a successful Newcastle-based property development and construction firm in which Tinkler bought a minority stake in 2008. Buildev had won a state government tender to develop part of the site a year earlier. Nobody had expected a coal loader would be proposed there.

Tinkler’s loader concept was first revealed publicly in December 2010. At the time, Tinkler was at the height of his wealth and influence. OK, it was touch-and-go, but in August he had pulled off his second deal of a lifetime: his major company Aston Resources had bought the Maules Creek project in the Gunnedah Basin from Rio Tinto for half a billion dollars and floated it at a valuation of $1.2 billion within nine months, and its shares were rising.

Tinkler had no ready source of cash flow, however. Maules Creek was just a proposal, years from production (and the project, now owned by Whitehaven Coal, still is not built). On paper, according to BRW, Tinkler was worth $610 million at the end of 2010, mainly due to the value of his one-third stake in Aston. But Tinkler was already reliant on borrowings against that stake to fund his empire and everything he owned was costing him money, not making it: his mining interests were all early-stage development plays, he was burning cash on mansions, fast cars and private jets, and he had sunk $200 million-plus into the beloved Patinack Farm horse stud spanning three states, with no sign of a return. Tinkler’s welcome — but expensive — takeover of the Newcastle Jets and shortly the Knights would only hasten the outflow of cash.

This was nothing new for Tinkler: right across his empire, right from the beginning, there was an almost permanent cashflow crisis. Which is one reason why it is difficult to believe cheques worth thousands of dollars were often signed without Tinkler’s knowledge. There would have been grim laughter up and down the Hunter Valley yesterday when Tinkler’s chief financial officer Troy Palmer was asked about a same-day payment he authorised to the Liberal Party, and denied this was unusually prompt: “When other employees and people ask for payment, I’ll pay it,” he testified, without a hint of a smile.

Tinkler had another problem: Aston had to get the Maules Creek coal to market. Tinkler only went public with his coal loader proposal in December 2010, after Aston got less than half its expected allocation of port capacity from Port Waratah Coal Services, owned and controlled by BHP and Rio Tinto, operator of two terminals at Newcastle. Aston complained about anti-competitive behaviour to the competition watchdog but was rejected. For Tinkler, it was another demonstration of the power of the incumbents he was determined to outsmart, as his mentor, the late Ken Talbot, had done. Tinkler’s grand vision was to create a new, vertically integrated coal business with operations from mine to rail to port, beholden to no one, and getting his own loader was absolutely key to the vision.

In late 2010, everyone knew Labor was headed for a wipeout in New South Wales. That did not mean, however, that the party’s sitting member for Newcastle, Jodi McKay, would lose her seat, which had literally been held by Labor forever.

In truth, Tinkler was in Singapore. It was reckless — tantamount to flipping the court the bird.”

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Categories: Companies, NSW, Players

6 Responses

Comments page: 1 |
  1. A downright ripping yard Paddy.
    Bravo!

    by paddy on May 6, 2014 at 1:14 pm

  2. Corporate cowboy; thanks Paddy.
    I hope that the DPP see’s fit to bring a case against him when ICAC is finished. It would be nice if he had adjoining cells to his LNP and ex-Labour mates at Long Bay or Silverwater when retribution comes.
    I think we can safely say he now knows all about ICAC

    by MJPC on May 6, 2014 at 2:56 pm

  3. If only ALL these appalling people would, eventually, face their just desserts.

    by AR on May 6, 2014 at 5:39 pm

  4. Excellent summary Paddy, especially the inclusion of all the little ‘side bars’ that give glimpses of the scope of c0rruption and graft that is ‘business as usual’ in NSW Inc.

    Troy Palmer’s reply that would appear to suggest the Libs were regarded as “employees” is gold, if only because it’s someone on the inside finally saying out loud what many have suspected for a long time.

    by fractious on May 6, 2014 at 6:30 pm

  5. AR re: just desserts - it would make an ageing, cynical greenie very happy if I live to see the day some upstart gets consent to start an open-cut mine slap-bang next door to one of that set who’ve bought big in the Hunter Valley through graft and corruption.

    by fractious on May 6, 2014 at 6:38 pm

  6. The nexus between coal/money/political corruption is being paraded in public by #ICAC. Grubby little sideshows like Nayfin’s, amusing as they are, deflect our attention from the big story: the coal industry has us all in its grip, and its virtually unstoppable.

    Is there any wonder why the constant climate change denialism exists? Its wheels are greased by the colossal amounts of money that go into keeping the status quo.

    by @chrispydog on May 7, 2014 at 1:33 pm

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