When you’re hot, you’re hot. And when you’re not, you end up in the courts. At least that’s the story of the week for coal billionaire Nathan Tinkler.
Tinkler, you will recall, started the week by sparking a legal fight with Frank Lowy and the Football Federation of Australia after trying to hand back the license to his A-League soccer club, the Newcastle Jets.
That didn’t go so well. The FFA has threatened to take Tinkler to court seeking up to $80 million in damages, and everyone from the boss of soccer’s player union to protesting Jets fans have urged Tinkler to rethink his decision.
Soccer is small fry in the world of Tinkler though, and he’s likely to be much more worried about a legal challenge he is now facing on his home ground of mining.
Hamish Collins, the former chief executive of Aston Resources, the coal junior majority owned by Tinkler, is claiming that he was owed 5% of portfolio of commodities projects, including coal, copper and iron ore projects.
This entitlement, which was part of an “equity participation” clause in Collins’ contract, is claimed to be worth between $125.9 million and $188.9 million.
Aston told the market about Collins’ legal action and said it would “vigorously defend these proceedings”.
With a market capitalisation of $2.1 billion, the legal action isn’t exactly a showstopper for Aston, even in the unlikely event that Collins’ claim for $190 million was successful.
But the timing isn’t great.
Tinkler is currently trying to complete a $5.1 billion merger of Aston Resources with Whitehaven Coal, with shareholders to vote on the deal on Monday.
The deal is a beauty for Tinkler. As well as merging Aston, he’s also managed to get Whitehaven to pay what has been described as a very full price for Boardwalk Resources, a coal explorer privately owned by Tinkler himself.
The deal represents another smart play by Tinkler, who had essentially amassed his fortune by trading a series of coal assets. He turned an undeveloped mine into a swag of shares in Macarthur Coal, sold these and bought the undeveloped mine now owned by Aston Resources, and now he’s trading again.
The soccer fight and the Collins claim are small fry in the scheme of Tinkler’s fortune, but time consuming – and potentially expensive – legal battles never please any entrepreneur.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
