The CEO of YSC Consulting offers a more holistic way to deal with colleagues who succeed despite treating others badly.
Trump, Ellison, White, Adgemis, Gupta and that
Rinehart portrait. For Rear Window, the end of shame and pretense added up to a
ripping year of stories.
Myriam Robin and Mark Di Stefano
Dec 20, 2024
Whatever you think of guard rails, they’re supposed to keep us safe. But
what’s the point if the man soon to occupy the most powerful office in the
world (for a second time) has been credibly accused of sexual abuse and is a
convicted felon? If the rule you followed brought you to this, Cormac
McCarthy once wrote, of what use was the rule?
Donald Trump’s re-ascendancy is the story of the year, and closes the
book on what already feels a faded era. One where political and business
figures nodded towards a consensus, and avoiding shame was a powerful
motivator. Where investors convinced us to sacrifice returns for lofty social
goals, and shareholders shared primacy with stakeholders.
Gruesome twosome: Will Gina Rinehart be Musk to Dutton’s Trump? David Rowe
Boring! As 2024 closes, the world’s power centre is a tasteless
champagne-soaked party in a gold-lined Mar a Lago ballroom. Gina Rinehart
and Anthony Pratt are fully
fledged presidential hangers-on. Rinehart’s lieutenant Teena McQueen
is doing
the YMCA with Javier
Milei. Elon Musk on a prescription high in a corner
scanning (Twitter) X after pouring
billions into politics. Will Gina be to Peter Dutton what Elon is to
Trump (minus the ketamine)? If you don’t think so, you haven’t been paying
attention.
The vibe shift hasn’t completed its Pacific journey. But its getting there.
In November, AirTree’s chief VC Craig Blair was asked to reflect on
badly behaving CEOs. Blair said “all founders are problematic” and “they are
deeply flawed characters” but “that’s what makes them special”.
Blair’s sin was saying the quiet part out loud. Naturally, Blair rushed off
to LinkedIn’s chino squad eco-chamber to correct himself, saying he didn’t
mean that “we accept or tolerate brilliant jerks”.
But so many do.
Mineral Resources founder and CEO Chris Ellison had a tough year. David Rowe
What’s mined is
mine
Consider Chris Ellison, the Mineral Resources tax cheat we
dubbed the Dark Lord of Dunedin. Catching our interest initially was the
man’s spluttering at working-from-home employers and flight radar movements
showing his catching
a private chopper to his Osborne Park office.
Then our retiring colleague Neil Chenoweth blew
open the offshore tax scheme Ellison and his buddies were operating out of
the British Virgin Islands. MinRes had called in Herbert Smith Freehills in
2022 to look at unseemly allegations flagged by a whistleblower. But only after
this newspaper began standing
them up did Ellison’s cloak slip. Not that he was even here when things
went south. He was taking
selfies at an LA Dodgers game.
Still, plenty of backers hope he can dig in. L1 Capital’s Raphael Lamm
put on a masterclass
in moral hazard, suggesting nothing he’d read made him reconsider his
fandom. Breaking Ellison’s spell might be easier said than done. After all,
Double Bay’s favourite family office TDM Partners insists he’s
literally magic!
To give them due, TDM’s Tom Cowan might be the only finance bro left
in Australia who knows how to pull off an IPO. His fund is the largest
shareholder of Guzman y Gomez whose float in June was the rarest
of bright spots for another historically
crap ASX pipeline. GyG is now a $4.3 billion Mexican restaurant chain run
by an American in Steven Marks, kept buoyant by index-hugging Australian
super funds. Another victory for multiculturalism.
Even with its bold accounting chicanery (like excluding
rent costs from enterprise value) the burrito rocket soared. Barrenjoey’s
co-founders Matthew Grounds and Guy Fowler (and other staffers)
are strapped
in. And they, like TDM, have escrow arrangements unwinding in 2025.
WiseTech co-founder Richard White will move to a “founding CEO” role. David Rowe
Accounting for
libido
But look: some charismatic founders come with too much jerk. WiseTech’s
high-margin software logistics business was humming before revelations that
guitar-loving co-founder Richard White was a rolled-gold creep. His
sex-for-investment scheming under the cringeworthy nom de plum Rick LeBlanc grabbed
headlines for weeks. One report claimed he showed up to a former lover’s
house armed with a bouquet of flowers with a sex toy hidden inside. The
LinkedIn Lecher Dozen – 12 roses, and one special surprise.
This all as White got married to former mob lawyer Zena Nasser. With
new baby boy in tow, he then came up with a circuit-breaker. He’d get his
salary and keep reporting to the board – Wisetech’s eternal God-king – but not
bother being CEO any more. Any dispute with the new and unappointed CEO? The
board will adjudicate, and remember, White is the largest shareholder, so
they work mostly for him. He’s even more dominant after WiseTech’s other
co-founder Maree Isaacs sold all her stock back to her former lover (on
terms that mean she has a $1
billion loan hanging over his head).
The saga also weighed on the Tech Council, the peak body for the sector,
where White sat on the board. We revealed that one
person who lost out to White for the seat was AirTrunk’s Robin Khuda.
What a year he had! Khuda convinced Blackstone his data centre business was
worth $24 billion. He was named co-winner of the Financial Review’s Business
Person of the Year. He was also sent
a letter by the tax authorities after our column raised
questions about his “naughty” raiding of his superannuation money to
service payroll.
Robin Khuda says you don’t want directors only focused on compliance. David Rowe
But back to the Tech Council, the “billionaires
lunch club” that could have had boy wonder and picked White instead. The
whole outfit is led by Tesla chairwoman Robyn Denholm. In January, a
Delaware Court judge kiboshed the eye-watering $US55.8 billion pay packet for
Musk, while lashing Denholm’s “lackadaisical
approach” to governance. Undeterred (Musk is brilliant have you heard,
brilliant!), Denholm led the charge to get it re-approved. It made things
worse. Last month the judge singled
out Denholm for misleading investors in said vote briefing materials.
Still, she ends the year as wealthy as she ever was, filing SEC forms to cash
in millions of soaring Tesla stock options.
Poker face
A sense of exceptionalism pervaded the conduct of even highly lauded
operators.
Consider Star, which spent much of the year self-combusting after falling
out with the NSW casino regulator. Steve McCann was appointed to save
the sinking ship. But first, and after his appointment in excruciating
circumstances, he just had to jet
off to London to tie up some loose ends.
A few weeks later, we revealed that McCann is already
a secured creditor to the company he’s meant to save. That is, if all goes
bust, he intends to secure every drop of his stupendous
Star entitlements at the front of the creditor queue. Investors (and
liquidators) had never seen anything like it. Like everything, it’s a story of
leverage. McCann holds all the cards, so McCann gets what he wants. Will Star
shareholders?
Star Entertainment CEO Steve McCann had all the bargaining power. David Rowe
Of course, it was a crummy year for all the casinos. McCann had earlier
managed to stabilise Crown Resorts but he did it by lumping the problem onto
Blackstone, now on the hook as the embattled casino titan bleeds
money and as its
revenues fall to the low millions. Crown is under new leadership (again) as
Blackstone looks for its own white knight. Private ownership hides many sins,
but absent their proximity to crime, can Australia’s casinos even turn a
profit?
Elsewhere on Sydney’s waterfront, green steel tycoon Sanjeev Gupta
took a risk. It didn’t pan out.
With everyone from his native titleholders to his Whyalla drycleaners owed
money by his GFG Alliance, he
splurged on a $12 million Finger Wharf apartment, and thanks to us, didn’t
manage to keep it quiet. Even his $10
million renovation of another property was made public, approved by a
Sydney court in this year’s dying days.
Meanwhile, the sharks keep circling. Like at Jon Adgemis′ pubs
empire, whose eye-watering interest payments were first
revealed by this column some 19 months ago. This was the year the creditors
came home to roost. Adgemis’ yacht has been
repossessed, his pubs are on the market (at foreclosure prices) while
numerous litigations wind their way through the courts. By year’s end he’d even
moved out of Point Piper’s iconic ‘Bang and Olufsen’ house, where he’d been living
rent-free courtesy of Chinese textile tycoon Jerry Qiu Yafu.
Marvellous
Melbourne
If flashy Adgemis’ unravelling had all the flavours of Sydney, in Melbourne,
intrigue is kept behind locked doors. At the Melbourne Club, home of the city’s
most blue-blooded elites, silk Allan Myers stormed
out in a blaze of indignation. This was in March, after Myers’ friend and
Malaysian-born property developer and philanthropist Jason Yeap had his
nomination quietly withdrawn.
Myers, perhaps the most patrician man in Melbourne, wrote
to all his close associates saying he wouldn’t be part of an institution
that discriminates on race. Other Melbourne Club members insisted
they didn’t. But Myers is out, and Yeap was never in.
In multiple other Melbourne establishments, contested elections for
office-bearer positions were held for the
first time in living memory. Members scoffed
into their scotches when not conducting what one candidate dubbed their “ungentlemanly
whispering campaigns”. Meanwhile in Sydney, someone leaked us a
whole membership list of the Australian Club, the nation’s most rarefied of
such institutions. Want to know what links members of the clergy to leading
businessmen to military generals to conservative politicians? The list is
searchable: knock
yourself out.
Richard Goyder was a late departure from Qantas, will he try to hold on at
the AFL. David Rowe
Elsewhere, the country’s bruised and battered consultant class did
everything they could to stay out of the headlines. Ex-PwC chief Luke Sayers′
explanations got called
“implausible” by a parliamentary inquiry, but he’s fine, now even discussed
as a possibility to eventually replace Richard Goyder as chairman of the
AFL’s commission.
That is, if the ex-Qantas chairman ever leaves. We revealed how talk of the
AFL’s Olympic Room was how Goyder was
gearing up for another crack at re-election. That’s after he spent the last
few months atop Qantas trying to overcome the mess he oversaw, including
through the release of a damning board governance review. He’s
out now and Qantas is striking a humbler tone. Though it, and a book by
erstwhile columnist Joe Aston, still managed to land Anthony Albanese
in a world
of pain over his free flight upgrades.
At the AFL at least, Goyder did eventually appoint a new CEO, while his old
one landed two jobs in the space of a week in June. Gil McLachlan went
from administering the AFL to running struggling wagering company Tabcorp. He’s
also working as a consultant for Crown-owner Blackstone, where his
first cousin is incidentally chairman of the private equity division.
In the same month, PwC chief Kevin Burrowes told a 400-person Zoom
call he was getting $1.2 million a year (not counting bonuses) from PwC global,
presumably paid for his success in containing the scandal to these shores.
This was revealed after he told the Senate in February he was paid $2.4
million. He corrected
it a few days later to $2.8 million, only for it to become $4 million once we
added everything up months later. Whoops!
Not so super
Meanwhile, the CFMEU was brought to a forced administration by our
colleagues and their reporting of corruption and criminality within its ranks.
But institutions are more than their leaders. Can silk and long-time union
barrister Mark Irving, tasked with fixing things as the federally
appointed administrator, control a movement filled with thousands of members
pushing in other
directions?
This is most consequential in the governance of Cbus, the Wayne Swan-chaired
$94 billion superannuation fund that had John Setka at its
40th birthday party and which appoints three
directors from the CFMEU to its board. Irving had the CFMEU’s existing
directors removed, only to reappoint one and then add union heavy and the head
of Australia’s worst-performing fund in Paddy Crumlin to another vacant
position by November.
Cbus chairman Wayne Swan. David
Rowe
At least Stephen Jones stayed out of that mess. The financial
services minister stakeholders love to hate, spent the year on a series of
outlandish decisions. When not
legislating lauded and consumer-friendly government policy like the digital
data right, or dragging
his feet on fixing the mess that left unaffiliated and long-suffering
financial advisors on the hook for the collapse of Dixon Advisory, he filmed
a video spruiking a superannuation fund forced out of standalone existence
for its poor performance. Go figure.
Iron lady
In May, we broke news that Rinehart had been lobbying the National Gallery
of Australia to remove
an unflattering portrait of her painted by Vincent Namatjira. The
NGA stood firm against pressure from Rinehart’s fiercest allies, even though
its council was led by Ryan Stokes (son of another
Rinehart ally in Kerry). If one ever needed evidence of the
Streisand Effect, the portrait became a global viral hit and spiked in-person
visits to the Canberra institution.
Strangeness continues to follow the iron magnate. She’s in a proxy
fashion fight with rival and eco-messiah Twiggy Forrest. It involves
converting conservatives to her Rossi boot brand away from his RM Williams.
Gina Rinehart’s protestations just triggered the Streisand Effect. David Rowe
Having that much money can do more than make people buy a new boot. In
March, we were in a state of disbelief to learn Peter Dutton had secretly
flown to Perth to attend Rinehart’s 70th birthday party. It wasn’t just
he’d scooted west for less
than an hour at the event, but that it came less than 48 hours before the
crucial Dunkley by-election in Melbourne. The Liberal party lost, but what did
Dutton gain? A few months later, Rinehart was hosting an expensive
political fundraiser for the aspirant prime minister at her Brisbane home.
So bring on 2025, and a federal election year. One which could see
Australians turf out their first one-term government since 1931. And the
country’s richest citizen pumping money into an election to help her sponsor
get the keys of power? You wouldn’t read about it.
