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March, 2019

Receivers sue NewSat boss Adrian Ballintine and chairman Richard Green for $270 million

NewSat founder and former chief executive Adrian Ballintine in Phuket. NewSat director Adrian Ballintine.
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Former NewSat CEO Adrian Ballintine in corporate jet with the CFO of his yacht company, Jason Cullen.

Liquidators to failed satellite company NewSat are seeking more than $270 million in damages from its former managing director Adrian Ballintine and former chairman Richard Green.

If successful, the action could lead to bankruptcy actions being taken against both former directors who have also been referred to the n Securities and Investments Commission for investigation by the group’s bankers.

Receivers to the company from McGrathNicol filed the action in late January in the Federal Court alleging both Mr Ballintine and Mr Green breached their directors’ duties on several occasions while managing the group.

The company was once touted as being “pretty capable” by Prime Minister Malcolm Turnbull who as the then communications minister believed NBN Co should be considering using NewSat’s satellites instead of building its own.

NewSat collapsed in 2015 owing the US government’s ExIm bank $280 million and European financier COFACE $108 million as its key creditors. Its collapse wiped out $200 million of investor money.

In the months ahead of its collapse, Fairfax Media exposed the turmoil and alleged governance issues within the company that was hoping to be ‘s first international satellite provider.

NewSat entered administration after being unable to secure more debt to fund the satellite project.

The company was effectively left asset-less following its collapse, despite having spent more than $270 million on construction, due to breaches in its financing and construction contracts.

US engineering giant Lockheed Martin, which was contracted by NewSat to make the Jabiru satellite, retained the asset when NewSat was placed into administration as per its contract with NewSat. This was after NewSat had made $207 million in payments to Lockheed Martin.

The launcher for NewSat’s satellite was likewise kept by French rocket launching company Arianespace under its contract with the group after NewSat also failed to complete its payments for work done. NewSat paid $56 million to Arianespace for the launcher ahead of its collapse.

NewSat also forked out $7 million to Cypriot-owned AP Kypros Satellites for licences that were never used.

McGrathNicol is seeking damages for the total amount of those payments alleging Mr Ballintine and Mr Green embarked on a massive expansion project without a business plan or a financial model.

“Neither NewSat, [its subsidiary] Jabiru nor any of their directors had any experience in undertaking a project of the type, size and magnitude of the expansion project,” McGrathNicol alleges.

The receivers also allege Mr Ballintine and Mr Green placed the company at risk by failing to take into account formal advice.

The receivers allege Mr Ballintine and Mr Green signed off on NewSat entering into three separate major deals relating to the construction of the satellite and two funding agreements while knowing the company did not have the financial capacity to complete the deal.

“At the date of the entry into the Lockheed agreement and the Arianespace agreement, NewSat and Jabiru did not have either cash or uncommitted finance facility to fund its financial obligations,” McGrath Nicol allege.

When financing was secured with ExIm and COFACE, Mr Ballintine and Mr Green were aware “it was likely that Jabiru and NewSat would not be able to comply with the terms of the finance agreements”, the receivers allege.

The two men also signed the agreements without giving a full presentation to the other members of the board and also failed to consider the financials of the deals, it is alleged.

Fairfax Media was unable to make contact with Mr Ballintine or Mr Green. They have previously denied any wrongdoing in regards to the management of the company.

Among the alleged governance breaches revealed by Fairfax were a series of payments from the company to Mr Ballintine’s luxury yacht business – a company that counted Mr Ballintine and other NewSat directors as board members.

Fairfax Media’s investigation also revealed the toxic culture within the company’s board room that included the leaking of a video of a boardroom meeting where one director appearing to physically stand over another during a heated argument.


Seven director’s resignation just before CEO’s exoneration raises questions

The morning after Sheila McGregor resigned from the board, Seven cleared its CEO Tim Worner of allegations raised by former staffer Amber Harrison, with whom he had an affair. Sheila McGregor’s departure may have been executed quietly, but it sent a very loud message.
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On the glorious US ski slopes of Vail where the rich and famous carve their way through white powder by day and socialise by night, it’s often hard to avoid running into others. Two ns in the news this week – media mogul Kerry Stokes and Sheila McGregor, the woman who resigned from the board of his Seven West Media on Thursday – would almost certainly have crossed paths.

Stokes, who often uses his palatial Colorado ski lodge to host business contacts, could well have entertained McGregor as a guest as they are believed to have been old friends.

Her decision to quit was announced hours before Seven West’s board exonerated its chief executive, Tim Worner, from a series of accusations against him including misuse of his company credit card and use of cocaine during work time, raised after an affair with an office staffer, Amber Harrison.

Mr Worner had apologised to Seven’s staff for the affair in late December, saying that “a lot of the allegations are factually incorrect”.

McGregor’s move demonstrates her independence and social conscience. Her departure may have been executed quietly, but sent a very loud message.

And what about the timing. The company issued a four-line statement on late Thursday to the n Securities Exchange about McGregor’s departure and on Friday morning announced the board had completed its review of the allegations and cleared its chief executive.

Seven has not publicly provided the report it received from investigations firm Allens Linklaters, and has not stated that the report has cleared Worner of the accusations made against him. Rather it says “the board has concluded that the allegations of misconduct by Mr Worner have not been substantiated”.

And when Seven refers to “the board” in this instance, it appears that it had not decided on its final handling of the report until after McGregor had resigned.

The message that Seven was putting out on Friday is that McGregor was not disputing the contents of the report, but that she was unhappy with the fact that Worner had engaged in with an affair with a junior member of staff.

Maybe. But McGregor has gone to ground and therefore won’t confirm that. And the timing of her departure could possibly suggest that she was not happy to sign off on the board’s decision on Worner.

It is also strange that McGregor chose Thursday night to resign when the board had known about Worner’s affair with Harrison since 2014. (It is possible McGregor wasn’t aware of it until a few months ago when it became public. She joined the board in 2015.)

Insiders say McGregor, a lawyer, had been instrumental in setting up the inquiry and its scope.

Indeed the scope of the investigation appears narrow. It concluded that Worner had not taken part in a decision to award Harrison a bonus (at the time the two were having an affair), nor did he instigate an investigation into her misuse of credit cards. Other members of Seven’s executive team did that.

The claims that Worner had been having sexual relationships with other staff members have been denied by him and the alleged partners.

The board is happy enough that there is no proof that Worner took drugs or misused his credit card.

This is despite the fact that Harrison’s statement to the inquiry conducted by Allens said the following: “I confirm that, during the interview, I provided copies of two taxi receipts which confirm that Tim Worner used his corporate credit card to come to my house on 6 June 2014. Text messages from that day will confirm the timeline of his arrival and departure. I have also supplied other dates on which I am aware he used his corporate credit card to travel to my house in Balmain for sex.”

Even if the only misconduct that can be levelled at Tim Worner is that he had an affair with Harrison, that itself should be a sackable offence.

And the behaviour of the Seven board and management, once they learned Harrison had misused credit cards and engaged in a relationship, alone is a staggering coverup.

She was contracted to receive initially $100,000 and later $350,000 with the condition she keep silent about the affair and destroy text message evidence.

Worner was rapped across the knuckles.


South Yarra bluff reaps Matthies more than $35 million

Saint Cloud mansion is part of a huge landholding sold by aged care builder John Matthies.China-backed developer Sterling Global is snapping up another high-profile Melbourne site, paying aged care builder John Matthies more than $35 million for eight neighbouring properties forming a South Yarra bluff.
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The 7904-square-metre holding with two street frontages took Mr Matthies five years to amalgamate at a reported cost of some $25 million.

The offering includes the distinctive 1000-square-metre semi-circle Saint Cloud mansion at 61 Kensington Road, a site which before it last exchanged in 2012 was South Yarra’s largest private land holding.

In 2013 Mr Matthies, director of n Aged Care Group, proposed to replace the site with a low-rise facility only capable of accommodating some 80 residents. Targeted to wealthy buyers, the complex would also have included a 40-seat cinema, golf simulator, wine cellar, hairdresser and several dining rooms capitalising on the unobstructed view the sloping parcel has over the Yarra River, and the CBD, about three kilometres away.

When the site was listed late last year as a development opportunity called Alexandra on the Park, sources familiar with planning speculated it could make way for a higher density project. The flexible property allows for basement car parking and numerous mid-rise apartment buildings, perhaps rising five or six storeys. Some of the sites Mr Matthies amalgamated to create the supersite already included older-style apartment complexes.

Covering addresses in tree-lined Kensington Road and Alexandra Avenue, the holdings are not in a pocket of South Yarra zoned for high rise buildings (Melbourne’s tallest suburban apartment tower, however, is under construction in the suburb, set to rise 50 levels at the corner of Toorak Road and Chapel Street).

CBRE’s Mark Wizel confirmed that after a range of offers from local and overseas, Alexandra on the Park sold to a locally based Chinese developer. Within the mix of prospective purchasers, he said, were aged care providers.

Mr Wizel marketed the site with colleagues Josh Rutman, Lewis Tong and Scott Orchard. The agents declined to comment on the sale price which is understood to be more than $35 million.

Sterling Global, financed by Chinese capital, has its n headquarters at Melbourne’s Rialto towers. Its development director, Brandon Yeoh, was unavailable when contacted to discuss the transaction or site future.

Last year, the developer gained approval to construct a $700 million, 70-level Jean Nouvel designed mixed-use building at 383 LaTrobe Street. It bought the low rise office occupied as the n Federal Police Headquarters from Investa Office Fund for $70.7 million in mid-2015.

Sterling Global also controls one of south-east Melbourne’s most prominent infill sites – a former quarry opposite the Huntingdale Golf Course in Oakleigh South, about 17 kilometres from the CBD.

The developer is currently working with the City of Monash council to have the land rezoned so as to allow it to be remediated and redeveloped. Disused for more than 20 years, Sterling’s proposal for 1221-1249 Centre Road is expected to accommodate 2500 residents in a master planned community with an end value of more than $600 million.

As well as apartment buildings rising about six levels, the Oakleigh South proposal includes serviced apartments and a student accommodation complex.

Previously described by Mr Yeoh as a “flagship development” for Sterling Global, the Oakleigh Site is expected to take between five and eight years to replace.


Home or office? It’s often now hard to tell

The Myer family foundation, MFCo’s new office designed by Carr Design. Photo: Shannon McGrathOffice and home environments have been blurred for the past few years.
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As work hours increase, and people often spend more time outside their home office space, designers have become more attuned to creating the creature comforts.

Kitchens, together with lounge and dining areas, have become enmeshed in the office environment. This is certainly the case with Carr Design’s scheme for the Myer family company’s latest office fit-out, MFCo at 171 Collins Street.

Previously located at One Exhibition Street, Melbourne, the Myer family was keen to be closer to the ground and occupy broader and more generous floor plates for its 100 staff.

While the staff work predominantly in open-plan style offices on level seven, the business and client meeting areas are at ground level (Collins Street), nestled above the Supernormal cafe and restaurant front on Flinders Lane.

“We conducted several workshops over a period of weeks with MFCo in order to establish how staff work and, as importantly, how they wanted their clients to feel, whether they are coming in for a meeting, or wanting a place to catch up on their own business if they happen to be in the city,” says interior designer Dan Cox, director of Carr Design, who worked closely with colleague, interior designer Molly Shelton.

Discreetly located behind a sliding steel door, the client/business centre is more akin to entering a sophisticated lounge rather than an office.

Deep leather armchairs, lounges and coffee tables sit below the generous ceilings (about six metres high), while a dining table is at the other end.

“We started with a fairly blank canvas, but we were keen to retain the industrial feel of the building, given its history in Flinders Lane,” says Shelton, pointing out the exposed pipes and electrical services that straddle the concrete ceiling.

While clients can discuss their investments informally on one of the lounge suites, or around the dining room table, they can also pre-book one of the three enclosed meeting rooms, which include operable walls to allow the spaces to be used for a variety of functions, including cocktail parties.

As the ceiling heights are generous, Carr Design was able to include a mezzanine level for executive offices. “We were conscious of creating sight lines to Flinders Lane to strengthen the connection to the passing traffic, both vehicular and pedestrian,” Cox says.

“One of the most challenging aspects was making the mezzanine spaces feel as though they were ingrained within the building, rather than added,” he says.

To create a contemporary office space for staff, Carr needed to include open-plan work areas on level seven, a floor that’s kept separate from clients.

Given that access is by security card, there’s no reception upon arrival. The staff walk directly into a large kitchen, complete with a 10-metre-long island bench. Banquette-style seating and loose furniture creates a sense of a home-style kitchen, but on a considerably larger scale.

“Often, you’ll see staff having an informal breakfast meeting first thing in the morning,” MFCo office manager Tamara Marsh says.

Although there are few divisions or enclosed spaces on the office level, Carr included three enclosed glass pods/meeting areas, together with a number of glass-fronted offices.

“People like to have the flexibility of moving to different work environments depending on the nature of the business,” says Cox, pointing out the banquette-style booths.

“However, irrespective of the space, there’s certainly less formality than in offices of the past,” he adds.


Nick Olive considers Inglis Classic as stepping stone to Black Opal for Fire Stoker

From the right, Single Gaze and Fell Swoop come home to finish in a barrier trail at Thoroughbred Park on Friday afternoon. Photo: Rohan ThomsonHaving conquered the highly fancied Mossman Gorge, the $250,000 Inglis Classic (1200 metres) could be the next target for Fire Stoker on the way to a potential group 3 Black Opal Stakes tilt.
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Canberra trainer Nick Olive is eyeing up the listed race for two-year-olds at Randwick next Saturday, but will wait and see how his colt pulls up before making a decision later in the week.

Fire Stoker proved too strong for the Matthew Dale-trained Mossman Gorge in the two-year-old handicap (1000m) at Canberra’s Thoroughbred Park on Friday.

The son of Denman won the gutsy battle up the home straight, finishing ½ length in front of Mossman Gorge with The Exchequer almost 1½ lengths further back in third.

Mossman Gorge won his first start in emphatic fashion two weeks ago and went in as the $1.30 favourite.

Dale had also nominated the son of Mossman for the listed Hinchinbrook Plate (1100m) at Randwick on Saturday, but opted to stay in Canberra.

Olive said he was still considering several options for Fire Stoker, including the Inglis Classic and the Black Opal.

“Really happy. The horse trialled super, he’s been going super. We thought he was a really good chance, but obviously when you’re taking on a $1.30 favourite you try and control your confidence,” he said.

“We’ll just see how he pulls up. He could go in the Inglis Classic next Saturday if he backs up, the [Black Opal] preview or the paddock. They’re all the options for him.

“[The Black Opal] is definitely an option for him, but the horse has got to be right. He needs to keep improving obviously, but things are going well with him.”

It was the first of three winners on the day for Olive, with Reliant saluting in the Maiden Plate (1000m) and Alba Gu Brath in the benchmark 60 handicap (1400m).

He also had stable star Single Gaze go around in her second barrier trial – up against Dale’s sprinter Fell Swoop – as she continues her comeback from a minor injury in the spring.

Single Gaze’s jockey Kathy O’Hara rode against her sister Tracy for the first time in years, with the latter returning from a two-year break.

The pair fought out a dead heat when they were apprentices in Gosford in 2005, but in the maiden handicap (1300m) – the last race of the day – Kathy was the best placed with fourth on Rosover.

Olive said he was still yet to decide on where Single Gaze will begin her autumn campaign, but it was likely to be in Sydney in a fortnight.

The $3 million Doncaster Mile (1600m) at Randwick in April is one potential target.

“I still haven’t worked out where we’re going to start, but we’ll get through the trial and then we’ll make some decisions,” Olive said.

“There’s a few options … probably mainly Sydney, but Melbourne’s an option as well.”