Stand up tall and proud, rich listers, it’s time for the Rich Pickings annual awards edition. This year we again recognise the best and worst of the rich, from mystery rich list contenders and shock investments through to bizarre plans and, of course, our entrepreneur of the year.
And the envelopes please…
For this award we have to go all the way back to January, when the $700 million empire of Perth energy and property baron Ric Stowe collapsed under more than $1 billion of debt. Stowe had always been something of an enigma for rich watchers, rarely speaking publically and spending a good part of the year overseas. However, there was nothing mysterious about the reason for his crash – too much leverage, plain and simple.
There are a number of ways a rich list member can suddenly emerge from nowhere – a big deal, a sudden inheritance or a share price that suddenly takes off. But relatively few emerge due to who they married – or rather, who they divorced. An exception to that rule is Edeltraud Franziska Grill, the first wife of John Grill, chief executive and major shareholder of engineering giant WorleyParsons. The pair divorced in February 2008, but in June, Grill transferred eight million shares to his former wife – worth about $190 million – following “orders made in the Family Court of Australia on May 31, 2010”. Edeltraud has since sold the shares, but she will be in contention for the 2011 rich list.
The clear winner in this category was Australia’s richest woman, Gina Rinehart. After appearing to be firmly focused on the mining sector for the majority of the year, Rinehart sent shockwaves through the business community by snaring a 10% stake in Ten Network for about $150 million, investing alongside James Packer, Lachlan Murdoch and Bruce Gordon. She followed up a few weeks later by buying a $50 million stake in Fairfax Media. What’s driving these investments isn’t exactly clear, but Rinehart appears to be looking to get a wider audience for her views on the mining sector and the Australian economy, which she sees as being under threat.
Clive Palmer has always been a colourful if not controversial figure, but he waited until late December to provide one of the truly bizarre rich moments. After setting up a company called Zeppelin International, Palmer went on to give the impression he was intent on reviving these fabulous flying machines for the modern age. But the next day he told Crikey that the media had drawn the wrong conclusion – Zeppelin International is just an investment vehicle that happens to share the Zeppelin name. We’re thoroughly confused, but perhaps that’s the whole idea!
It is every entrepreneur’s dream to turn $1 million into $500 million, and this is exactly what a consortium including mining veterans Travers Duncan and Brian Flannery and RAMS Home Loans founder John Kinghorn managed to do. The trio own 12.02% each of Cascade Coal, a company that owns two coal deposits in New South Wales. In early December, they announced they had sold an option to develop the deposits to White Energy in a $500 million deal that had one very striking feature – Duncan and Flannery are actually chairman and managing director of White Energy. The deal, which is still to be approved by independent directors, is more proof of how quickly fortunes can be made in the mining boom.
You couldn’t say Andrew Forrest was ever down and out this year, but his fortune has enjoyed a remarkable turnaround since the middle of the year. If we go back to late May, shares in Forrest’s iron ore miner Fortescue Metals Group were hovering around $3.72, having fallen from $5 a month earlier due to the perceived threat posed by the mining tax. But clearly the market realised it has got its assessment of Fortescue very wrong, and the shares have since jumped back to $6.75. In just six months, the value of Forrest’s stake jumped from $3.6 billion to $6.6 billion.
Cardboard king Richard Pratt has been dead for the best part of two years, but the scrapping over his estate is just getting started. There are two former models battling for a slice of the Pratt fortune – former escort Madison Ashton, who claims she is owed millions of dollars in payments promised by Pratt before his death, and Pratt’s former mistress Shari-Lea Hitchcock, who has made a claim on behalf of herself and her daughter with Pratt. The Pratt family are fighting both claims, but the battle over the estate could take a long time to sort out.
Has anyone had as many ups and downs in one year as rich list contender Gerry Ryan? The entrepreneur who is best known for his caravan company Jayco, was caught up in the Melbourne Storm salary cap scandal as a director and sponsor of the club, and then suffered through the pain of a losing grand final with the St Kilda Football Club, another organisation he has poured money into this year. But it all turned around in November when Ryan’s horse Americain won the Melbourne Cup, and the good times continued when it was revealed Ryan had topped a list of Australia’s top entertainers thanks to his ownership of the company behind the Walking with Dinosaurs arena production, which had revenue of $140 million last year. What a year!
This year’s clear winner is young coal baron Nathan Tinkler. While he is perhaps known as one of Australia’s most colourful entrepreneurs thanks to his hefty investments in horse racing and sport, his moneymaking prowess is exceptional.
Consider this chain of events. In November 2006 – less than four years ago – he buys a coal mine for $30 million, after stumping up $1 million of his own money. In June 2007, he sells the mine to Macarthur Coal for $265 million, taking the bulk of a $200 million cut in Macarthur shares. In May 2008, he sells those shares for $445 million. Then he buys the Maules Creek deposit for $480 million in mid-2009, before floating it earlier this year for $1.2 billion. In less than four years, his fortune has gone from less than $1 million to $600 million.
Tinkler is an engaging figure and at just 34, he looms as someone who could dominate the rich list for decades to come.
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.
