Ben Hills investigates
Nathan Tinkler was on the phone from his office in the Honeysuckle estate on the Newcastle waterfront begging, pleading: “I’ll pay you, I promise, just give me some more time… don’t let them take my stuff.”
It was a winter’s afternoon in 2005 and one of Tinkler’s many creditors had finally lost patience and sent in the sheriff’s officers to seize what they could. The debt was only $19,000 — peanuts compared with the hundreds of millions of dollars Tinkler would borrow over the next few years — but the people on the other end of the line had lost patience with the “drip feed” tactics Tinkler had taken and were determined to collect.
Two years earlier Tinkler and his father, Leslie, had walked into the offices of the earth-moving equipment importer Melroad, in the southern Melbourne bayside suburb of Carrum Downs, to discuss taking up a franchise in the Hunter Valley. “I remember them walking in,” laughs the company’s managing director, Phil Lellman. “They were like clones — half a ton of meat each, I’ll tell you. They looked like a couple of yobbos (with their) big legs and double chins. We had to find a couple of big chairs for them without arms.”
The Tinklers may have looked like hicks, but “they could talk the talk and walk the walk, even though they were a bit clumsy on their feet (and they) said how they could sell all these machines….. but it was all smoke and mirrors. We were conned, ” says Lellman.The pair walked out with a hand-shake agreement, and a few days later were back with a truck to transport three brand-new Japanese Kobelco excavators back to Muswellbrook, where they had a business servicing the surrounding coal mines.
A few months later Lellman and his national sales manager, Doug McQuinn, received some disturbing news. One of the machines, worth about $40,000, had been sold to a local contractor — and Nathan Tinkler’s company, Custom Mining Solutions, had not passed on the proceeds to Melroad. Failing to get a satisfactory explanation, they cancelled the franchise agreement and took the story to the NSW District Court where they obtained an order for the payment of the money.
Still Nathan Tinkler kept stalling, and later Lellman and McQuinn would find out why: he was scraping together every cent he could beg, borrow or misappropriate for a $1 million deposit on some neglected coalming leases at a place called Middlemount in central Queensland which he believed were worth a fortune. He sold his house, he borrowed money, he withheld payment from creditors like Melroad — and even some unfortunate apprentices working for him — but eventually Tinkler got the money together.
And that was why he was so desperate not to have the sheriff seize the furniture, and particularly the computers, in the flash Newcastle offices into which he had moved. On the hard-drives were all the information — the financials, the geological reports — that Tinkler would need to build one of the fastest fortunes in Australian business history. “He’d have done anything to stop us taking those computers away,” says McQuinn. “He agreed to pay it off, he agreed to personally guarantee the debt, he agreed to pay interest… it was amazing — I think we were the only people to get our pound of flesh out of him.”
For Tinkler, the humiliation of having the debt-collector at the door was worth it. The story has been told in a hundred gawping business-page profiles. How within two years he had turned that $1 million into a cool $441 million as he traded the leases for shares in a company called Macarthur Coal which almost trebled in price as China’s insatiable blast-furnaces drove the price of coal to record levels. How last April he was hailed as Australia’s youngest self-made billionaire after doubling down that bet on another coal deposit at a place called Maule’s Creek in the NSW outback.
And now how it all appears to be unravelling. His last, and biggest deal — an eye-popping $5.2 billion bid to take over the Whitehaven coal company — has fallen apart. Investigations over the past two months have found that Tinkler’s empire has been embroiled in no fewer than five major court cases with a potential downside of nearly $200 million. Angry creditors are lining up. The huge high-interest loans from banks and private equity funds which underpin his coal holdings are falling due. Hundreds of racehorses from his vast stable are to be sold at an everything-must-go auction next month (memo subs: October). The stable of $500,000 supercars and motorcycles has already gone. Luxury houses have been sold at knock-down prices and the hilltop site in Newcastle where he planned a $14 million mansion is empty — Tinkler and his family have abruptly moved to live in Singapore.
It may be premature to predict his demise — Tinkler has leapt from the jaws of debt before. But he already holds the record as Australia’s briefest billionaire. Alan Bond bestrode the Australian corporate landscape for nearly 20 years from winning the America’s Cup to bankruptcy and jail. Christopher Skase had a gilded decade as a billionaire before fleeing into exile. The value of Nathan Tinkler’s main asset, his stake in Whitehaven, has plummeted from $1.2 billion to around half of this in less than four months. He didn’t need (Resources Minister) Martin Ferguson to tell him that the resources boom is over. Still aged only 36 he is disappearing before we really got to know him.
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So obsessively does Nathan Leslie Tinkler guard his privacy that the Australian Who’s Who in Business lists neither the date (February 1 1976) nor the place (Port Macquarie, on the NSW north coast) of his birth, nor where he did his growing up and schooling. In fact his home town is not in the Hunter Valley, as most think, but frosty Inverell on the New England tablelands. Nor was his upbringing as humble as he would like to imply. His look-alike father was an earthmoving contractor and Nathan did his early schooling at a private Catholic parish school, Holy Trinity, before moving to the local state school for his final two years.
Leslie Tinkler now runs a stable of racehorses from a small stud named Serene Lodge at the hamlet of Kendall, near Port Macquarie, and is frequently seen around the country race-courses in the area. Like their famous son the Tinkler family seem to regard the media as a particularly unpleasant skin disease. The only comment I could get was from his younger sister, Donna Jane Dennis, who answered her mobile phone to recite as if from a script : “The family is extremely proud of Nathan. He has done amazing things and we love him dearly. Thank you.” She then hung up. Tinkler himself called journalists “gibberers” in a speech, and once, famously, told off a journalist from Melbourne’s Sunday Age who had the temerity to phone him : “You’re a f—-ing deadbeat. People like me don’t bother with f—ing you. You climb out of bed for your pathetic 100 grand a year — good luck.”
His teachers say there was no hint that he would ever make a mark in the world, particularly after he failed his Higher School Certificate, coming in the bottom third of results in the state — or so he boasts. “He was just an ordinary sort of a kid,” says his former head-master, Paul Alliston. His only interests were punting on racehorses (he used to wag school to hang around the local TAB betting-shop) and Rugby League football, where he played on the forward line — “not the tallest in the team, but the heaviest,” says his former coach, Martin Sullivan, who recalls the day young Tinkler survived a tremendous kick in the head. “When he came out of hospital someone said ‘they don’t have that many stitches in a wheat-bag.’ I bet he’s still got the scar.”
His other great hobby was eating — he has never been able to keep his appetite under control, even though he was once shadowed everywhere by a man who described himself as Tinkler’s personal trainer, lifestyle coach and bodyguard, Corey Baldock. “We always knew when Nathan had been over,” says a neighbor whose son went to school with Tinkler “The frig was empty.” A former business partner said he was fond of “Devonshire cream teas” for breakfast, and a friend and fellow race-horse owner, the discount electrical chain magnate Gerry Harvey, speaks in awe of the night Tinkler defeated another elite boozer, media multi-millionaire John Singleton, in a drinkathon, downing two cans of beer for every one that Singleton was able to choke down. A few months ago, however, his spokesman, Tim Allerton, surprised journalists at the Newcastle Herald by providing and requesting they use a new portrait of a substantially slimmer Tinkler, rather than the baggy-bellied profile shot that they had been using. The rumour spread that, desperate to lose weight, he had had a stomach-banding operation.
When Tinkler left school he was urged by his father to leave small-town Inverell and get a trade. He moved to Muswellbrook and trained as a pit electrician, something he later described as a “dirty mongrelly job.” When he could eventually afford a Ferrari he ordered a customised licence-plate PIT LECO. Never keen to exert himself, a former worker at the mines recalls Tinkler getting into his car to drive 50 metres, reaching out of the window to flick a switch, and then driving 50 metres back rather than walk. Along the way he married a buxom blonde, Rebecca, and they had four children in fairly quick succession: “Up the valley we didn’t get Austar and that back then (so) we started early,” he once said.
In 2002, aged 26, he formed the Support Services business which eventually employed about 50 people providing electricians and other maintenance workers to the coal-mines in the district. But somewhere along the way he had caught the mining bug — his great hero was the billionaire Ken Talbot, the founder of the Macarthur Coal mining company who cheated the hangman when he was killed in a plane crash in the Congo in 2010 whilst awaiting trial on charges of bribing a Queensland cabinet minister (the Cabinet minister, Gordon Nuttall, got 14 years’ jail). The price of coal was beginning a decade-long climb and Tinkler began searching for a prospect, eventually settling on Middlemount, selling his business, moving to Newcastle and staking everything he owned on that $1 million roll of the dice.
Tinkler had become a mogul, though not a mining mogul as is often wrongly reported. He has never mined a tonne of coal in his life, making his millions instead by borrowing money to buy mining leases and then selling them at a profit. While the price of coal rocketed skywards — it quintupled in a decade — he looked like a genius. People failed to understand that if you buy a duck farm and the price of a duck goes to $100 because newly-affluent Chinese like eating them, you are not Einstein, you are just a lucky duck-farmer. Now that the tide has gone out, as the investment guru Warren Buffet is fond of saying, we can see who has been swimming naked.
The stories of the stupendous spending spree Tinkler went on after he cashed in his almost-half-a-billion-dollar profit on the Middlemount deal are legion and legend. He bought up some of the most expensive real estate all along the NSW coast and into Queensland. In Newcastle he lashed out on not just one house but three, clustered around beachside Dixon Park in the ritzy suburb of Merewether. He spent $8.8 million on two adjoining hilltop houses, demolished one and then had the council approve a $14 million redevelopment for the site. On the other side of the park he paid a whopping $4.3 million for a mansion owned by local rugby league legend Andrew Johns, almost double what the place was worth, judging by its sale four years later for $2.8 million. According to one local real estate agent. “He was a very naive purchaser, like a Lotto winner. In this case the big red ball came down right on Andrew Johns’s head.” Johns later repaid Tinkler, after he tried to back out of his purchase of the local soccer team, sacked the coach and sacked the marquee player by telling the local newspaper : “Nathan Tinkler has proved himself to be very volatile. He’s a man with very little patience and even less loyalty.”
His foray into racing also won him few real friends, apart from the vendors of horses (and the saleyards which took a commission) who were suddenly showered with hundreds of millions of dollars as Tinkler set about building the biggest racing stables and stud business in the country. “We’re trying to create another Woodlands here,” he bragged, referring to the stud built up over decades by the “chicken kings” Jack and Bob Ingham which in 2008 was sold to the Sheikh of Dubai, Mohammed bin Rashid al-Makhtoum for $460 million.
For much of 2007/8 there was hardly a thoroughbred sale on earth that didn’t share a piece of Tinkler’s largesse. In three days at the Magic Millions on the Gold Coast, he bought 48 horses for $13 million. He bought another 32 yearlings at Karaka in New Zealand for $7 million. He bobbed up with bids at sales in Deauville, France, Tattersalls in the UK, Keeneland in the US and in Argentina. He told goggling reporters in Hokkaido, Japan, that his “lifetime goals” included winning the Prix de l’Arc de Triomphe and the Japan Cup, two of the world’s most famous races. But where to put them all?
Just before Christmas 2007 Andrew Bowcock and his wife Lasca got a phone-call from a real estate agent saying he had “a guy who’s fallen in love with your property,” Alanbridge, a boutique horse-stud in the Segenhoe Valley near Scone that had been in the family for 65 years. “It’s not for sale,” he said. Back came the answer : “Everything’s for sale at the right price.” The buyer was Nathan Tinkler and he was not going to take ‘no’ for an answer. Eventually the Bowcocks agreed to part with the property for $8 million — “the dearest bit of dirt ever sold in the Segenhoe Valley.” Something else struck the Bowcocks as weird : “I showed him round the property, but do you know he never even walked into the house before he bought it.”
Andrew Bowcock agreed to stay on as bloodstock manager but things became strained as Tinkler continued to buy horses by the hundred — at one stage he was buying two a day, every day. Alanbridge became too small to accommodate them all, so Tinkler spent millions more on another nearby stud, Riverslea, and renamed the two properties Patinack Farm. But something wasn’t right. The Bowcocks started getting complaints that suppliers were not being paid: “Nathan was trading off our good name because no-one knew him from a bar of soap,” said Bowcock. “There was the feed, the farrier, the vet — he would just hang them out to dry until they went for a summons. It’s just the way he is. ‘Because I can’ should be his motto.”
Tinkler proved to be “very, very abrasive. If he wants something done he wants it done yesterday and he doesn’t mind stepping on people’s toes. I think he feels that people are dispensible,” says Bowcock. After just six months “for some unknown reason he sacked us” — the Bowcocks had joined a lengthening list of people whom Tinkler befriended, used, then discarded. Researching this profile I came across no fewer than seven trainers, a managing director, a stud manager and a racing manager, all of whom Tinkler had sacked, and most of whom had finished up bruised and out of pocket because of the experience. The stud is now referred to locally as ‘Pat’n’sack.’
Most prominent of these is the Sydney trainer Anthony Cummings, son of Australia’s most famous trainer, Bart Cummings. “It’s a sensational opportunity for me,” enthused Cummings when Tinkler engaged him to buy and train his stable in 2008. Three years later they were facing each other in the Supreme Court of NSW with barristers drawn. Cummings originally claimed he was owed $167,000 in training and upkeep fees, later upping the ante to more than $1 million, claiming commissions were also owing. Tinkler cross-claimed that Cummings had taken $2 million in “secret commissions” from vendors of horses he bought for Patinack Farm. Before things could get even uglier Gerry Harvey, who, with Singleton, owns the Magic Millions, mediated a compromise over a four-hour dinner at Darcy’s restaurant in Paddington. Cummings, like many of the people Tinkler has dealt with, says he is bound by a confidentiality agreement not to talk about the settlement — except to deny a report that they had been drinking a Cloudy Bay sauvignon blanc. “It was a red from what I remember,” he said.
At last count Tinkler had spent somewhere between $200 and $300 million buying 1300 horses, including 10 stallions for which the service fee ranges up to $22,000. Patinack Farm has become the biggest in the country — but is it the best? Inevitably, buying at such a pace, mistakes were made — most embarrassingly when Tinkler agreed to pay $2.5 million for a star stallion named Sidereus, only to discover that it was a “rig” — it only had one testicle. So far the results of Tinkler’s spree have not been promising — of all the hundreds of starts his horses have had he has won only half a dozen of the richest ‘group one’ races. He has said his hobby is costing him $2 million a month. For all this he won no more than $5.5 million in prize-money last season, and possibly collected a similar amount in stud fees.
Said one racing insider : “The horse racing industry thinks he’s a bit of a joke — he’s haemorrhaging money like you wouldn’t believe. Anywhere in Australia there’s racing you’ll find Tinkler has a horse and it’s the most expensive horse in the race and it’s running seventh. He is getting a terrible bang for his buck. He’s hired and fired people, used them up and then spat them out in a most brutal fashion. He’s also got a trail of creditors you wouldn’t believe.”
As if to confirm this grim prognosis, last month (memo: August) news leaked that he had tried to sell his entire operation to Sheikh Fahad al-Thani, the Qatari royal who owns last year’s Melbourne Cup winner Dunaden, for $200 million. Thanks but no thanks, said the sheikh. So next month (memo: October) there will be a special Magic Millions clearance sale at which Tinkler will try to sell 350 of his horses. Gerry Harvey would not comment on a report that Tinkler is so cash-strapped he had to get an advance of $20 million on the sale.
Tinkler’s splurging millions on his other hobby also ended in tears. Since he was a lad he had always loved fast cars as this article from the Newcastle Herald of 2005 attests:
Hunter Street Hoon
Magistrate Richard Wakely fined Nathan Leslie Tinkler, 29, of Beaumont Street, Hamilton $1600 in Newcastle Court yesterday. He disqualified Tinkler for six months for driving a car at 108 kilometres an hour in a 60 zone in Hunter Street at 2.15 pm on September 19.
In 2008 a Sydney motoring afficionado named Tim Sommers advertised for investors in a business he had established, the Australian Supercar Club. The club had bought and leased a stable of some of the world’s most expensive, and exclusive, cars — for a fee of $20,000 to $50,000 a year its members could drive cars which cost up to $500,000 each including a 340-kilometre-an-hour black Ferrari Scaglietti, a yellow Lamborghini Gallardo, or a red and silver convertible Rolls Royce. Ryan Stokes, the Channel Seven boss was a member as was Jason Akermanis, the AFL star and the jazz trumpeter James Morrison. Tinkler saw the advertisment and — typically — wasn’t content with just becoming a member, he wanted to buy the club.
Sommers flew to Tinkler’s office in Brisbane (where he couldn’t get a park because Tinkler’s Ferrari was sprawled across four parking spots) and while Tinkler watched non-stop racing from around the world on an enormous flat-screen TV they negotiated a deal in which Tinkler would initially buy 40pc of the club for $2 million. Wrote Sommers : “I think that Nathan is a very charming guy when you first meet him. You don’t get to where he’s got without knowing how to manage people. But when you actually get into bed with him he changes. At every level of business the man-mountain is determined to be ruthless and beyond ruthless. He loves the skullduggery.”
Almost inevitably within nine months the two were at each other’s throats, the locks had been changed on the club’s Mosman office, Sommers had been voted off the board of the company he founded, the whole operation was placed in receivership with debts of around $4 million, and Sommers and Tinkler squared off in the NSW Supreme Court.
The case ended in a bloody draw with Justice Richard White criticising both sides as having acted in an “oppressive manner” — Sommers’s evidence was, he said, “unreliable” and Tinkler’s failure to front up to give evidence “not explained.” He ordered Sommers to pay $189,000 for two top-of-the-line Audis he appropriated, and Tinkler $218,000. But the case provided, in an affidavit by Sommers, some extraordinary insights into Tinkler’s foul-mouthed, bullying character and his way of doing business — and why the word ‘boganaire’ was coined to describe him.
Tinkler, Sommers swore, was “very blokey, a ‘man’s man’ (who) swore and cussed virtually every sentence” and “his sexist and racist behaviour was shocking.” He traded in his first private jet, a $7m Hawker 400XP, saying : “I don’t want the f—ing thing anyway. I paid too much for it and I don’t like it. Once it had someone else in it I didn’t want it anymore. It’s like someone f—ing your missus.” When Sommers sent him a picture of a club function Tinkler emailed him : “Where are all the topless chicks? We are male fukn✓ chauvinists, mate… how are we going to attract members?You need to watch the skulls — that is what we are trying to create.” Tinkler told him to buy a Porsche 997 turbo cabriolet for the club, stating “…he wanted a car with no lid so that he could visit his beach houses.” When the club ran short of money and Sommers asked Tinkler to honour his promise to provide working capital he responded : “You are a c—- asking for another $500,000. Getting the begging bowl out is pathetic and I don’t give a shit what the contract says.”
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Tinkler is yet to pay the costs of trying — and failing — to obtain an injunction to stop Sommers publishing more lurid tales about him in his e-book, Big Boys Fall Out Over Their Toys. According to Carl Hagon of Clamenz Evans Ellis the bill will come to about $18,000. But that is the least of his worries. In another humiliating legal defeat the other day a NSW Supreme Court judge gave him until September 1 to pay $14 million to the property developer Mirvac to honour a contract to buy some industrial land at Newcastle as part of his plan to build a $1.5 billion coal loader. The state government cancelled the project after its infrastructure supremo, the former premier Nick Greiner, described it as “bloody-minded nonsense” and Tinkler refused to pay up. Then there’s the grand-daddy of them all, an action by Hamish Collins, the former chief executive at Tinkler’s Aston Resources, who claims he was dudded out of an equity partnership and is suing for $157 million.
There are, of course, two sides to every story — unfortunately Tinkler, unlike some of his enemies, declined an invitation for an interview. But if these actions succeed it will not just be a blow to his own wobbly finances, it will devastate his adopted city of Newcastle, which was once dubbed Tinklertown after he splurged millions of dollars buying the two local football clubs, the Jets soccer team and the Newcastle Knights rugby league team. Many locals believe the purchases were an attempt by Tinkler to win over public opinion for his controversial coal-loader, and that once the project was rejected he lost interest in sport and was on the move again — from Singapore to Hawaii where has reportedly splashed out $15 million on a beachfront mansion in a friend’s name. Meanwhile back in Newcastle there were reports that his struggling Knights, once again drubbed out of a place in the NRL finals, were having difficulty paying their bills and had requested an extension of time to lodge their accounts.
Which would come as no surprise to Phil Lellman, Andrew Bowcock, Anthony Cummings, Tim Sommers or any of the dozens of other creditors that Tinkler has spurned over the years. His attitude is best summed up by a comment he made to Sommers as the Supercar club headed for the cliff : “Where is my $2.2 million? If this business needs $2 mil✓ every six months then I am f—ing out.”
Publishing Info
Pub: Sydney Morning Herald and The Age
Pub date: Saturday 15 September 2012
Section: Good Weekend
