Mining magnate Joseph Gutnick hits financial ‘tough times’ amid $55 million lawsuit
MINING magnate Joseph Gutnick has admitted he’s in financial strife amid a $55 million lawsuit and claims he has struggled recently to even pay the rent.
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MINING magnate Joseph Gutnick has admitted he’s in financial strife amid a $55 million lawsuit and claims he has struggled recently to even pay the rent.
Mr Gutnick, dubbed “Diamond Joe” after finding his fortune in diamond mining, appeared at the Supreme Court where he is fighting the lawsuit.
Sources say the case is a must-win battle for the former Melbourne Football Club president who could be left unable to pay any judgment against him, despite an estimated fortune last year of more than $250 million.
“It is tough times, I don’t deny it,” Mr Gutnick said.
“It is well known that its difficult times for the resources industry and it affects me as well.
“If anyone’s in this industry they’re going through difficult times. To what extent is just speculation,” he said.
The Herald Sun has been told that over the last year Mr Gutnick has struggled to pay staff salaries and has fallen behind in the rent for his swanky St Kilda Rd offices.
It is understood his financial crisis has forced him to drastically reduce his staff, including letting go of his long-serving personal accountant and security detail.
A source said: “If he loses this judgment, he just won’t have the capacity to pay. It’s not looking good for him.”
The claims come just months after Gutnick fell off the BRW Rich List after ranking 196th last year with an estimated wealth of $255 million.
A defiant Mr Gutnick refused to speak directly to the claims, calling them “speculation”, but said he would bounce back.
“Diamond and gold prices will definitely rise in the future,” he said.
Mr Gutnick is being sued by Indian company Indian Farmers Fertiliser Co-operative for payment of a $55 million award issued by the Singapore International Arbitration Centre in May.
But lawyers for Mr Gutnick argued that the award should be set aside, claiming it was contrary to public policy within the meaning of the International Arbitration Act.
Mr Gutnick has denied any wrongdoing.
The case is the latest in a string of legal battles for Mr Gutnick, who earlier this year was taken to court by businessman Benjamin Koppel over claims he failed to honour a $750,000 debt payment deal.
Last year he was dumped as chairman of Blackham Resources and faced legal action over claims he defaulted on a deal to plough capital into the mining company.
And in 2013 he was ordered to pay more than $1 million to former associate Roy Tashi who successfully argued he had been ripped off by the prominent Jewish community leader.
Supreme Court judge Justice Ross Robson found that Mr Gutnick had been misleading.
“Mr Gutnick led Mr Tashi to believe that his object was to help Mr Tashi. In fact, Mr Gutnick’s object was to line his own pocket at Mr Tashi’s expense,’’ he said.