Eddie Obeid trial: Mining executive tells of approach by high-level banking representative
A staffer for banking giant Lehman Brothers approached a mining company in 2008 trying to broker a deal to team up in bidding for mining licences, the Eddie Obeid trial has heard.
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A mining company set to enter a joint venture with then-politician Eddie Obeid for exploration on his family property had no idea who the real landowners were, a court heard.
A former director of Monaro Mining told the former Labor minister’s coal licence conspiracy trial that in July 2008 investment banker Gardner Brook approached his company to discuss a deal.
Warwick Grigor testified that the Lehman Brothers executive said he represented landowners with a coal-rich rural property who were interested in “teaming up” with a company that could bid for mining exploration licences.
“I wanted to find out who they were and he wouldn’t disclose that,” Mr Grigor told the NSW Supreme Court.
“He said that there was going to be a public tender for coal licences and that Lehman Brothers would like to support Monaro Mining should it decide to bid for those licences.”
The Crown alleges Mr Brook helped the Obeids reap millions by becoming silent partners in a coal venture while former resources Minister Ian Macdonald leaked confidential information to them about the rorted tender process for Mount Penny in the Bylong Valley between September 2007 and January 2009.
Macdonald, Obeid and his 51-year-old son Moses have pleaded not guilty to conspiracy to commit misconduct in public office.
Mr Grigor said Mr Brook was “rather vague” about who his mystery clients were, but stressed they wanted more than just landowner compensation under The Mining Act.
Mr Brook told the mining veteran there would be a closed NSW government tender process within the next 30 days, and the landowners were seeking equity in the project, the court heard.
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“We had limited negotiating power,” Mr Grigor said.
“If Monaro Mining was to bid and be successful in its application, he was looking at angles to make sure his client would participate in the development of the ownership of any mine that may come out of that in the future,” Mr Grigor said.
Mr Brook revealed that while several licences would be up for tender, the main one he and Lehman Brothers were interested in was Mount Penny, the court heard.
“It was a farm with the name Cherry in it,” Mr Grigor said.
A farmer has already testified that he didn’t know there were rich coal reserves on his property named Cherrydale Park when Obeid came to buy it in 2007.
The court previously heard in September 2008 the NSW Department of Primary Industries invited Monaro to bid for 11 coal release areas targeted under an expression of interest process.
Mr Grigor agreed that following the collapse of Lehman Brothers, Monaro proposed to pay Mr Brook a $25,000 monthly consultancy fee for three months for the Mount Penny project, and he remained “very secretive” about the identity of the landowners.
The Crown alleges that despite not revealing the Obeids were the silent partners in the Mount Penny project, Mr Brook had been regularly updating Moses Obeid.
Mr Grigor, who founded Far East Capital with Andrew “Twiggy” Forrest in 1991, said that between 2007 and 2009 he never met or communicated with Moses Obeid, his 76-year-old father Eddie or Macdonald.
Monaro was allegedly due to receive a 20 per cent stake in the Mount Penny project, while a Chinese investor would get a 25 per cent cut and the silent partners would reap 55 per cent.
Mr Brook is expected to testify that Mount Penny had an estimated coal yield of more than 100 million tonnes with the potential to expand to the wider area which could yield as much as 700 million tonnes.
But Monaro backed out of its bid for the exploration licence in the allegedly crooked tender in May 2009 because of a lack of financing.
New bidder Cascade Coal eventually won the rights to mine, and $30 million was funnelled to the Obeid family through a complex web of front companies with a promise of a further $30 million which never eventuated, prosecutor Sophie Callan said.
The trial continues.
‘MAD PUNTER’ WOULD BUY LAND AHEAD OF COAL DEAL: OBEID TRIAL
A court has heard a mining executive, who claimed his company was guaranteed a coal lease over property owned by Eddie Obeid’s family, feels “you’d have to be a mad punter” to assume property prices would go up because of mining deals.
Monaro Mining’s Mart Rampe, earlier this week, told the trial of the former Labor powerbroker Obeid, his son Moses and former mining Minister Ian Macdonald a banker told him Monaro was “guaranteed” to win the rights to mine in the Bylong Valley in 2008.
Mr Rampe also told the court, on Tuesday, he didn’t know the identities of the three parties who owned land around the “plum project” known as Mount Penny.
The Crown alleges the Obeid family was among them and they’d bought into the valley, near Mudgee, in mid-2007 acting on a tip off from Macdonald that the area could be worth millions to coal companies.
All three have pleaded not guilty to conspiracy in the NSW Supreme Court.
The Crown alleges the banker, Gardner Brook, was keeping in contact with Moses Obeid while dealing with Monaro but Mr Rampe said he was none the wiser.
The court, on Wednesday, heard Monaro was running low on funds by April 2009.
At that time Mr Rampe became concerned the company wouldn’t be able to come up with a $25 million “additional financial contribution” it needed to give to the Department of Primary Industries to secure the coal lease, he told the court.
The court heard Mr Rampe thought his company would pay it off over time – but the government told him he needed to come up with the funds quickly.
Monaro collapsed soon after, the court heard.
Moses Obeid’s barrister, Maurice Neil QC, asked Mr Rampe if he knew what would happen to property values around Mount Penny once the deal was inked.
“I have no view as to property values at all … it could go either way,” Mr Rampe said.
The court heard the time between a license being granted and an actual mine beginning to work could be up to a decade. Mr Rampe agreed it could take “a very long time”.
“Did you have a view that you’d have to be a pretty mad punter to assume the price of the land would go up?” Mr Neil asked.
“I guess,” he responded, agreeing the actual mining license was what held the real value.
The mining executive agreed 99 times out of 100 mining exploration amounts to nothing but it can become valuable if the coal can be extracted economically.
The trial continues.
EDDIE OBEID ORDERED BACK INTO COURT
The pandemic had previously delayed the high profile trial over concerns of Obeid’s health.
But Justice Elizabeth Fullerton, on Friday, was clearly exasperated by the constant connectivity issues.
Obeid’s videolink has been frequently dropping out forcing the trial to pause while he reconnects.
When he is connected, he has often appeared only as a silhouette, he was repeatedly told to mute his microphone and his lawyer often was told to call him and sort out the issues.
“I am concerned by the reliability of the connection through to Cherrydale” Justice Fullerton said.
“I have an accused who must be in attendance during his trial to be dropping out. So I regret that I think it’s going to be necessary for him to return to town.”
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She said Obeid would have to come to the city where either he could front court in person or a more reliable internet connection could be used to solve the issues.
Obeid’s son, 51, and Macdonald, 70, are attending the trial in person as are witnesses.
The court previously heard Moses told a neighbour there was $100 million worth of the resource beneath the Bylong Valley at the time they were buying Cherrydale.
OBEIDS WANTED $100M AND PLACE TO ‘COOK GOATS’: COURT
Moses Obeid allegedly said his Labor powerbroker father wanted to “cook goats and hang around” on a hobby farm but the $100 million worth of coal buried beneath the family’s new Bylong Valley property was the real “life changing” opportunity.
Eddie Obeid, Moses Obeid and former NSW mining Minister Ian Macdonald have all pleaded not guilty to conspiracy charges after the Obeids were accused of buying into the valley following a tip off by the Minister that the area was ripe for coal exploration.
The NSW Supreme Court on Tuesday, heard Moses had moved to Elizabeth Bay in 2005 and became fast friends with his new neighbours, panel beater Peter Fitzhenry and wife Nicole.
The couples quickly became very close, the court heard. They had dinner multiple times a week and even knocked down the fence in the backyard so their children could play together.
That was when Moses told the Fitzhenrys he and his family were looking to buy a rural property and that Cherrydale, outside Mudgee, looked like a good fit.
“My dad (Eddie Obeid) just wants to cook goats and just hang around on the property,” Mr Fitzhenry alleged Moses told him on one occasion.
“Sometime later he told me there was coal underneath Cherrydale … If the coal was to be taken up there, he said to me, it would be a life changing experience, a life changing situation, it would be fantastic money-wise.”
Moses had showed them photos of the shed, rose garden and home on Cherrydale, Mrs Fitzhenry said, and she recalled a conversation about coal under the farm.
“We’re going to make a lot of money out of the property, the family is looking at making $100m and we will basically be set for life,” Mrs Henry said Moses told her.
“(Ian Macdonald’s name) was mentioned in relation to the coal leases on the property and he had told the (Obeid) family there were leases on that land.”
Mrs Fitzhenry recalled Moses suggesting they mortgage their home to buy up a $3m property adjoining the new Obeid property because of those leases.
“Moses said Peter should buy the adjoining property because there would be money to be made out of it in the long term,” she told the court.
“He referred to the leases on the land, the coal leases on the land.”
The Fitzhenrys, in their evidence, said they weren’t interested in buying into the Bylong Valley with the Obeids.
“I told him it was crazy to go into that venture,” Mr Fitzhenry said.
“It would attract so much objection it wouldn’t be worth doing and that was the end of the conversation.”
Mr Fitzhenry told the court Moses told him Cherrydale had been owned by Kerry Packer’s accountant.
The court heard the panel beater was good friends with legendary horse trainer Bart Cummings, who lived up the road.
Mr Fitzhenry told the court he was at home with Moses while the younger Obeid was on the phone with Macdonald and horse racing came up.
“He gave me the phone and I gave (Macdonald) the tip,” he said.
“I gave Macca the tip, and I believe they won.”
Mr Fitzhenry said he knew Moses was “well-connected” but the court heard he held scant details about the precise work of the politician’s son as a lobbyist.
Under cross examination Mr Fitzhenry said he’d introduced Mr Cummings’ son, Anthony, to Moses.
But he said he didn’t realise Anthony had lobbied Moses to help redevelop Randwick Racecourse.
He said he had no idea Moses had lobbied for the opal industry in Lightning Ridge.
Mr Fitzhenry had vague memories of a discussion with Moses about some Russian-designed radar that can detect mineral deposits beneath the earth but had no memories of Moses wanting to “introduce” it to the state government.
Mrs Fitzhenry said she recalled Moses and Eddie Obeid meeting with Macdonald at the Elizabeth Bay home.
The trial continues before Justice Elizabeth Fullerton who scolded Eddie Obeid’s lawyer because his client’s microphone was making too much noise.
“I’ve said it before and I will not repeat it … if this does not work Mr Obeid will need to make himself available in the city,” she said.
The elder Obeid is appearing in court using a videolink to keep him safe from the coronavirus pandemic but the trial has been extensively delayed because of technical difficulties resulting from the technology.
AUGUST 31
The trial of Eddie Obeid has heard a real estate agent sold swathes of farmland to a stockman buying on behalf of unidentified “clients” that were really the NSW MP and his family.
The NSW Supreme Court also heard another man, allegedly involved in purchasing land for the Obeids, asked a local woman for directions to a property he had purchased but never seen.
Obeid, his 51-year-old son Moses and former NSW resources Minister Ian Macdonald have pleaded not guilty and are fighting conspiracy to commit misconduct in public office charges at their NSW Supreme Court trial.
The Supreme Court, on Monday, heard Mudgee real estate agent Stewart Adlington was contacted by a livestock agent who wanted to inspect an 800 acre property called Donola in mid-2008.
The pair were in the car driving when Mr Rodd, the court heard, said he could offer $600,000 on behalf of his clients for Donola.
“I was not made aware who (his client) was,” Mr Adlington said.
“I trusted him on it, and saw no reason for any concern that he was wanting to view the property on behalf of someone else.”
As they drove out of Donola, Mr Adlington said, the livestock agent asked about the farm they were travelling through – a farm known as Coggan Creek.
Coggan Creek was being sold by another agent in town and Mr Adlington said he would reach out to the owner, Ted O’Brien.
He told Mr Adlington he’d part with the bulk of the farm for $3.5 million and the negotiations began.
The farm was eventually transferred to a company name and then into the name of another man, Justin Kennedy Lewis.
The crown alleges Mr Lewis was also acting on behalf of the Obeids. He is not charged with wrongdoing.
Mr Adlington said he didn’t meet Mr Lewis at the time the offers were made to buy the farms.
“I think I spoke to him once, possibly twice, very late in proceedings,” the real estate agent said.
“(It was) at a time we were desperate to exchange a contract and had delay after delay after delay.”
Crown Prosecutor Rebekah Rodger said Mr Lewis’ “lack of familiarity” with the property is relevant to the case because it showed he was not the “bona fide purchaser”.
Mr Adlington said coal mining was not mentioned in the sale or lengthy negotiations of the properties.