Australian Club clubbed by losses; cops on case in Harold Scruby $700k crypto scam

Former prime minister John Howard leaving The Australian Club, the country's most prestigious men’s club. Picture: Jane Dempster

Once a citadel of male superiority and clout, Sydney’s Australian Club appears to be wilting in a storm of financial pressures that has routed its balance sheets and sent a shiver up the backs of management, according to the latest missive from its club ­president.

Not that this hasn’t been in the offing for some time, as Margin Call has reported. The club’s June newsletter was first to flag a 7.5 per cent increase to its dining costs – with a 5 per cent hike to the vino – in order to accommodate inflationary pressures.

“Even the most creative menu design and careful attention to food wastage cannot contain the challenge we currently face,” said club president Richard Fisher AM, with much shaking of the jowls.

One can usually deduce that things aren’t going terribly well when even the kitchen staff have to scrounge for cheap alternatives to the truffle oil and edible gold. But two months later and it seems there’s even less wind blowing in the club’s sails, with Fisher once again warning of dark clouds approaching.

Illustration: Rod Clement

“The pandemic and the flu, combined with the volatility of the sharemarket, has had a profound impact upon the club’s financial performance,” Fisher wrote to his spavined membership.

In the six months to June 30, the club’s operations suffered a loss of $1.4m, although this had been offset by investment income of $1.3m for the same period, he said.

Market fluctuations have also sunk their teeth into the club’s holdings. “The reported financial performance of the club this year will be further affected by unrealised losses on the club’s ­investments of $4.7m,” the letter said.

By way of comparison, the trading loss for 2019 – before the onset of the pandemic – was $1m, with net investment income at $300,000, members were told.

All of which points to a heightened need for a lift in the club’s membership, perhaps by finally permitting women to join; in addition to the financial headwinds, they could also descale the club’s deep leather armchairs, still heavy and oppressive with patriarchy.

But if there is a silver lining to this tale of woe then it’s apparently an uplift witnessed in the utilisation of a temporary bar established in the Norman Cowper Room. Very popular after 5pm, Fisher said.

No one would begrudge a restorative or two while the ship is going down, of course.

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Colonial for Codina

The soft-landings out of Josh Frydenberg’s office continue, with former chief of staff Martin Codina picking up a senior role with Colonial First State, Margin Call has learned.

Codina, who previously worked for BT Financial, has apparently been appointed to a group executive position with the wealth manager, owned by Commonwealth Bank and US private equity firm KKR. It follows his boss’s recent arrival at Goldman Sachs as a senior regional adviser for Asia-Pacific, where we expect him to stay until at least 2025, just in time for the next election.

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Billionaire v Benz

Billionaire rich-lister Nick Politis has been dragged into the ongoing saga between Mercedes Benz dealerships and the German car manufacturer, which is being sued in Melbourne’s federal court for $650m in compensation.

The feud is a test case in franchising law, with the dealerships claiming that a new agency sales model, implemented in January, which mandates that dealers sell Mercedes Benz cars at a fixed price for commissions, will obliterate their finances.

Nick Politis. Picture: Sam Ruttyn

On Friday, witness Tony Jennett, chairman of the Mercedes Benz National Dealer Council, was forced to surrender private notes of a meeting held in 2019 attended by big cheese Politis and Paul Warren of Peter Warren Automotive Holdings, among others.

Ventilated during the hearing was not only that Politis remains one of the richest men in Australia, and that his net worth sits in the neighbourhood of $2bn, but that he is also a powerful figure able to “access industry and political leaders”.

Jennett confirmed that during the 2019 meeting, Politis told the gathered men that Mercedes Benz should be “paying goodwill to compensate dealers for loss of franchise” and that, because this was “unlikely to happen”, they should lawyer-up and mount a challenge.

“Is that a verbatim note of what Mr Politis said?” asked Robert Craig QC, acting for Mercedes Benz.

“Yes,” Jennett replied.

If nothing else, Jennett’s notes – suggesting Politis moved quickly to sue the car company – appear to undermine the dealers’ previous arguments that Mercedes Benz had blindsided franchisees and not negotiated in good faith.

“There was a co-ordinated effort to undercut (the) agency (model) from a very early point in time,” Craig argued before Judge Jonathan Beach. “Undercut and oppose,” he added.

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Cops on the case

Over the weekend we reported on the ensuing court battle between Pedestrian Council chairman Harold Scruby and a scam that fleeced him of $700,000 through an offer of “Sovereign Green Bonds” distributed by Deutsche Bank.

Suffice it to say the bonds do not exist and neither does “Shane Porter”, the fellow with a British accent who spruiked the bogus investment product and passed himself off as a Deutsche Bank representative.

To be sure, Margin Call has sighted the 13-page prospectus for Sovereign Green Bonds and, save for a few typographical oddities and a solecism or two, it’s a reasonably passable piece of fraud.

It’s also worth noting that a similar bond scam – typically involving victims’ funds being deposited into a bank account, then transferred to a cryptocurrency exchange – was recently attempted using the Barrenjoey Capital brand.

Curiously, despite being brought to the attention of various authorities, the swindle still hasn’t been flagged on the ­Australian Competition and Consumer Commission’s Scamwatch homepage.

We’ve learned, too, that in addition to the civil matter playing out between Scruby’s Pinot Noir Pty Ltd and the alleged perpetrator of this deception, Tony Adams, director of Sovereign Green Capital Pty Ltd, it also transpires that the NSW Police Force are involved in the case and continuing to pursue lines of inquiry.

“In May 2022, officers from Northern Beaches Police Area Command commenced an investigation after reports a 75-year-old man was defrauded of a large sum of money,” a NSW Police Force spokeswoman said.

And we hear it’s not just cops on the northern beaches drawing bits of string on this matter.

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Partner’s prerogative

Beach Energy shares dived on Monday with a drop that exceeded 13 per cent, a consequence of an underwhelming annual profit figure and other production ­forecasts.

Beach’s largest shareholder, Kerry Stokes, would have undoubtedly felt the pain, but far smaller investors, such as Winston Archer, would have been hurting too.

Archer is the husband of Tasmanian Liberal MP Bridget Archer, who holds a minuscule number of shares, but Winston appears to be a proponent of oil and gas slurpers, including Beach Energy, Central Petroleum and Cue Energy. He also owns shares in BHP, which remains one of the biggest emitters in the country.

Nothing overly controversial about all of this, except that it was Archer who crossed the floor last week to support the Albanese government’s climate change bill and emissions reduction target. With such strident expectations, should we expect any demands to be made of Winston sell his shares any time soon? Probably not. “My husband’s share portfolio is entirely a matter for him,” Archer says. “However, I do note that BHP, Beach Energy, Central Petroleum and Cue Energy … acknowledge the importance of taking action on climate change and have emissions reduction targets.”