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BFCSA: Archive 2006 Primelife saga, Sent, Walker and de Crespigny, Babcock et al

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We were right...peas in a pod!

 

Australian Broadcasting Corporation

TV PROGRAM TRANSCRIPT

LOCATION: http://www.abc.net.au/7.30/content/2006/s1730220.htm

Broadcast: 31/08/2006

Court case reveals Primelife boardroom drama

Reporter: Greg Hoy


http://www.abc.net.au/7.30/content/2006/s1730220.htm

 

KERRY O'BRIEN: It would have to have been one of the most colourful boardroom dramas to have emerged from Australian business. The battle for control of the retirement and aged care corporation Primelife, involving some of the most famous names in business - has spilled into the Victorian Supreme Court, revealing publicly, in candid detail, how bruising and brutal boardroom politics can be. Now as a Supreme Court judge quietly considers his verdict in the case, control of the long-troubled corporation is again about to change hands. Greg Hoy reports.

GREG HOY: The Victorian Supreme Court must now decide. Having heard the evidence in a corporate power struggle for control of an aged care empire - evidence including video of board meetings taken without the knowledge of directors, evidence of involvement of one of the notorious figures of Melbourne's gangland wars.
It's a struggle entangling two knights of Australian business - Robert Champion De Crespigny AC, and Ron Walker AC, OBE, pitted against the tough and colourful business identity Ted Sent, founder of Primelife.

TED SENT, FORMER CHIEF EXECUTIVE, PRIMELIFE: I believe so much in the company that I'll sacrifice almost anything to want to make it the greatest, and the best.

GREG HOY: Almost anything. Now Ted Sent is suing Primelife and Mr Walker and De Crespigny for wrongful dismissal, while the company is suing him for misconduct.
And as the Supreme Court deliberates, an even bigger fish is circling Primelife, positioning for takeover - the international investment group Babcock & Brown, lured, like the others, by the rising ranks of Australian retirees looking for somewhere to live.

ROBERT TOPFER, FUNDS MANAGEMENT, BABCOCK & BROWN: The macro-economic numbers are pretty simple. The population of 70-year-olds or the over 70-year-olds is going to double, go up by about 100% over the next sort of 12 years. And at an age care level, above 85, it's going to go up 75% over the same period. So, you know, there's a strong correlation between high growth and where investors want to go.

GREG HOY: Primelife, which has about 6,000 residents in 50 upmarket retirement villages and aged care properties nationwide, was initially built up by Ted Sent through various tax minimisation syndicates - Mr Sent's forte - which has previously scared off investors, and attracted the ire of the Australian Securities and Investments Commission. When Ron Walker and Robert De Crespigny bought their way onto Primelife's board in mid 2003, Ted Sent was mistakenly optimistic he'd remain as chief executive. TED SENT: I mean, I have a contract and I sincerely hope to be able to live that contract out in good state and I sincerely hope that, you know, that the board agrees with me.

GREG HOY: Others predicted a brawl in the boardroom.

JIM HAZEL, FORMER CHIEF EXECUTIVE, VILLAGE CARE: We have three emperors in the boardroom. I wouldn't expect there to be three in two years' time.

GREG HOY: Three years later, Jim Hazel has replaced Ted Sent as chief executive. Mr Sent and his close assistant, Sandy Porter, have been sacked and together are suing the company for $5 million in damages, triggering the counter suit and an avalanche of startling boardroom allegations.

ROBERT TOPFER: That was all before my time, unfortunately...fortunately.

GREG HOY: Unfortunately, the Supreme Court was told, without the knowledge of directors board meetings were filmed, allegedly by mistake, the video recordings later accessed by Sandy Porter and only then by scanning her fingerprints on a biometric security system. The resulting footage played out in court revealed Robert De Crespigny was worried how much power Sandy Porter wielded, describing her to fellow directors as "a curse", "an absolute disaster" and later as a "big worry". Though precise transcripts are disputed, the court heard that both Mr Walker and Champion De Crespigny believe Ted Sent's so-called "chequered history" spoiled the company's credibility. A senator, Mr De Crespigny told fellow directors, walked up to me and said, "I hope someone has told you have gone into bed with the biggest crook in Australia." At the very outset, in an email to Robert Champion De Crespigny read to the court, Ron Walker described chief executive Ted Sent as an "absolute sleaze". But later in the boardroom, Mr Walker agreed with Robert De Crespigny that Ted Sent was actually a very valuable asset to Primelife who should be retained, but that he just shouldn't be allowed to run the company. Unbeknown to Ted Sent, the court was told a Melbourne law firm was hired by Primelife directors to devisee a strategy for his dismissal. Meantime, Ted Sent himself began negotiating to sell his 30% share holding in Primelife to Babcock & Brown which remains unconcerned by the boardroom shenanigans.

ROBERT TOPFER: That was a deal for us that got us a position in the sector. I think it has been a challenging investment, but one that will prove to be a significant one in building a platform for the future.

BRENT MITCHELL, SHAW STOCKBROKING: Primelife is at a stage where it's about to experience a significant profit growth and I think it's an opportune time for Babcock & Brown to have a greater involvement in Primelife.

GREG HOY: So everyone a winner? Well, the repercussions from the court case are likely to resound. In the 1990s, Melbourne underworld figure Mario Condello had introduced Ted Sent to an associate, Mick Gatto, who told the court that he was handed $60,000 in Primelife cash to deal with death threats made against Ted Sent. Years later, the court was told, Ron Walker and Robert Champion De Crespigny had personally investigated ongoing cash payments totalling around $230,000 made by Ted Sent to Mick Gatto to settle industrial disputes on Primelife's building sites and to be Mr Sent's eyes and ears, despite board protests that the payment should stop. This was one of the reasons given for Ted Sent's dismissal.

BRENT MITCHELL: The movement from management by Ted Sent to the current management, the change in the basis of the syndicates, and the development pipeline they have going forward suggest that the good times are to come.

GREG HOY: The Supreme Court decision is still pending. But in three short years so much has changed at Primelife. Though he remains an investor, Ron Walker, now chairman of John Fairfax Holdings, has left the board, describing his experience as "very challenging". Robert Champion De Crespigny has left Australia to live in England. The indefatigable Ted Sent has set up in competition with his old company under the banner People First, though some question his ability to raise sufficient capital.

BRENT MITCHELL: People behind People First have had that trouble in the past and that's evident in some of the history of Primelife and I think that going forward will make it difficult for them to compete on a larger scale.

GREG HOY: Mick Gatto has, of course, had his own court battles, acquitted on the basis of self-defence of the shooting death of a well-known hitman in the same Melbourne restaurant where he once lunched with Ted Sent. Ron Walker and Robert Champion De Crespigny are being applauded for a mission accomplished. Both stand to make millions. Babcock & Brown will shortly take over the company, develop the business on a far greater scale, and, finally, change the name Primelife, and in so doing, will bury a troubled past.

ROBERT TOPFER: Suffice it to say that we are interested in building that sort of platform. We do think it's a good sector and there is no doubt in my mind that the management of Primelife have done a good job in pulling that company through the difficult times that it had had and the difficult structural position it was in, into a very clean and well-positioned platform.

KERRY O'BRIEN: Quite a tale of corporate intrigue. Incidentally, we did seek comment from Robert Champion de Crespigny, Ron Walker and Ted Sent for tonight's story, but none was forthcoming while the court considers its decision. Greg Hoy with that report.

 

 

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