Tinkler Living Off Allowance From $1.5 Billion TrustJoe Schneider
Nathan Tinkler, the former Australian mining billionaire under pressure from creditors, said he’s living on an allowance he gets from his wife who controls a A$1.4 billion ($1.5 billion) family trust.
Tinkler’s wife Rebecca owns the units and manages the Tinkler Group Family Trust whose holdings include about 200 million shares of Whitehaven Coal Ltd., or about 19.5 percent of the outstanding shares of the Sydney-based coal miner, Tinkler testified in New South Wales Supreme Court today. The trust has about A$600 million of debt, he said.
“So, your wife gives you money from time to time?” Robert Newlinds, lawyer for the liquidator of Mulsanne Resources Pty, a former Tinkler company forced into liquidation, asked during the examination in Sydney.
“I’m very lucky, yes,” Tinkler responded.
The electrician-turned-entrepreneur was ranked as Australia’s youngest billionaire at the age of 35 by BRW magazine in 2011 after he sold his house in 2006 to help buy the A$30 million Middlemount coal lease in Queensland. He sold the lease a year later to Macarthur Coal Ltd. for about A$465 million in cash and shares. He’s now struggling to meet creditors’ demands, with several of his companies threatened with liquidation for not paying debts and taxes.
Tinkler testified today he owns no stocks, bonds or motor vehicles, with the only asset in his name a farm that’s valued at about A$700,000. He and his wife hold joint bank accounts that have about A$250,000 in them and his taxable income, from interest earned from the bank accounts, was less than A$10,000 in each of the past two years.
The trust distributions are tax-free, he said, adding he didn’t know how much he received from the trust and couldn’t round off an estimate even to the nearest A$100,000 or a million.
It’s the first time the former billionaire has divulged details of his finances, having been ordered to appear in court to account for last year’s collapse of his planned investment in Brisbane-based coal explorer Blackwood Corp.
Tinkler’s Mulsanne had agreed in May to invest A$28.4 million in a share placement in Blackwood. Mulsanne failed to come up with the money and Blackwood forced the company into liquidation in November in a bid to recoup the debt.
Tinkler lost ownership of his personal jet and helicopter after GE Commercial Australasia Pty pushed TGHA Aviation Pty into receivership in November. Tinkler’s Dassault Falcon 900C jet and AgustaWestland A109S helicopter are now up for sale.
Australia’s Deputy Commissioner of Taxation applied in December to liquidate eight Tinkler companies including Newcastle Jets Football Operations Pty and Newcastle Knights Pty, Tinkler’s soccer and rugby teams, to recover tax dues. Tinkler settled most of those cases.
Newlinds said he wanted details of Tinkler’s finances and the trust arrangement to determine whether the debt could be recovered in the event Tinkler was forced into bankruptcy.
Tinkler yesterday blamed the commodity trader Noble Group Ltd. for the collapse of the Mulsanne-Blackwood deal. Noble failed to complete an agreement to buy his 75 percent stake in a royalty from the Middlemount coal project, valued at about A$25 million, Tinkler said.
“I quickly worked out that I’ve been hung out to dry,” Tinkler said today, citing a time last year when Noble’s Executive Director William Randall stopped taking his calls.
Stephen Brown, a Noble spokesman, declined yesterday to comment on Tinkler’s testimony in an e-mail.
Tinkler also blamed a “vigorous media campaign against me” for scuttling the deal.
He said he tried to raise money to pay for the Blackwood investment, discussing the deal with Bank of America Corp., Credit Suisse Group AG and UBS AG, as well as hedge funds in Hong Kong and New York, and in the end wasn’t successful.
“Normal banks do not understand my business model,” he said. “They don’t understand how I create my wealth.”
The case is In the matter of Mulsanne Resources Pty 2012/00296966. Supreme Court of New South Wales (Sydney).