Ed Gannon: Beware those who would pull the wool over your eyes

WHEN livestock prices go up, the chancers pop up and a case from the 1980s still stands as a warning, writes Ed Gannon.

When livestock starts to hit record prices, it does attract the attention of the fly-by-nighters and ne’er do wells.

WHAT would you do with $325,000? Buy a third of a house in a major city? Perhaps an Aston Martin to pretend you were James Bond?

Or what about a bull? That is what Roger and Lorena Jefferis did last week in Queensland.

Most would recoil at the thought of paying such money for an animal, but the bull, NCC Justified, will hopefully pay for himself through doing what comes naturally out in the paddock.

But if you think $325,000 is a lot of money, consider JC & S Lustre 53, a Merino ram from the Collinsville stud in South Australia.

In 1988, he sold for a world record price of $450,000 at the Adelaide Show. It is a price that has never been challenged and almost guaranteed never to be beaten, converting to $986,000 in today’s dollars. A few years after that sale, the wool price collapsed and Collinsville went into receivership.

It was big news because Collinsville was the most prestigious and influential Merino stud in Australia, if not the world.

Then the real fun started.

Collinsville was in debt to the tune of $45 million, owed mainly to the State Bank of South Australia. Collinsville’s debt was a significant factor in the collapse of the Bank.

The bank was owned by the South Australian government, which suddenly found itself owning a sheep stud. It fished around for a buyer, but there was little interest in buying a stud in a collapsed wool market. Then Melbourne “businessman” Phillip Claude Wickham came forward.

if you think $325,000 is a lot of money, consider JC & S Lustre 53, a Merino ram from the Collinsville stud in South Australia. Picture: Sam Rosewarne

No one in the wool industry had heard of Wickham, who was suddenly offering to buy Collinsville for $9 million. But he was keen and said he had the money.

Alarms bells should have gone off when Wickham drove from Melbourne to Collinsville in January 1995 to inspect the stud.

On that trip, he paid for a night’s accommodation at a Tailem Bend motel by cheque. The cheque bounced. Twice.

But the SA government was desperate to get rid of the stud, so agreed to sell it to Wickham. The required deposit was $500,000, but Wickham didn’t have that on him. So he offered a $50 down payment. And Treasurer Stephen Baker accepted. That is not a typo. He paid a $50 deposit on a $9 million business.

If the government had done its homework, it would have discovered Wickham was a former bankrupt whose grand plans never really aligned with reality.

Of course, the Collinsville deal never went through. Wickham had to demonstrate he had the ability to pay $9 million within a week of signing the contract. He never did.

The stud was later sold for considerably less — about $7 million — to well-known sheep figure Paddy Handbury.

Wickham popped up again in 1998 when he reportedly faced 81 charges in the Victorian Magistrates Court alleging dishonesty. He claimed he was the chief executive of a $450 million company and intended to buy an island in Queensland and a West Australian cattle station.

In 2012, he was fined $17,000 by Consumer Affairs Victoria for “acting as an agent’s representative while ineligible to do so”. By then he was using the name Henri Claude Louis Philippe DuPont. Evidently not to draw attention to himself.

I don’t know where Wickham is now and I’m certainly not saying the buyers or vendors of the Brahman bull in any way resemble him.

But when livestock starts to hit record prices, it does attract the attention of the fly-by-nighters and ne’er do wells. Any industry hitting its peak does.

My advice is that if you see Phillip Wickham’s name pop up in your industry, drop everything and run like hell.

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@EdgannonWtn