Ex KPMG partner Brendan Lyons unleashes on colleagues; Sydney Airport CEO heads for windfall
While many may have dreamt of it, the opportunity to lash a former employer on the public stage is a circumstance hardly achieved, let alone when said employer is one of the largest accounting firms in the country.
Such was the rare case for former KPMG partner Brendan Lyon, whose no-holds-barred testimony to a NSW public accountability committee on Monday was nothing short of scathing when it came to his former colleagues and the firm at which he worked on major infrastructure projects over the past three years.
Along with well-publicised claims of bullying against NSW Treasury Secretary Mike Pratt, Lyons also shed light on internal machinations within the big four firm, including how partner James Hunter was seen as a “rainmaker” for Treasury contracts due to his close connection to the high-profile bureaucrat.
Asked how often Hunter, also chair of the prestigious Pymble Ladies College on Sydney’s north shore, worked from the Martin Place offices of the Treasury, Lyon sad he “lived there”, going on to add how Hunter often claimed to spend time at Pratt’s house and even had changed his email signature to include “cabinet in confidence” for a time “until it made him look a little silly”, due to the regular nature of Treasury work he spent time on.
Lyon, who left the firm in June and who has also served a stint as chief of lobby group Infrastructure Partners Australia, spoke out against KPMG’s internal controls, its HR and leadership and risk management, describing the Transport Asset Holding Entity (TAHE) work at the centre of the inquiry as akin to a crab mentality.
“It is embarrassing for KPMG because they didn’t have the moral strength to say no to one or the other,” he told the David Shoebridge-chaired committee.
“They backed two horses or they put two crabs in a pot and waited to see which would come out alive.”
Emails tendered to the committee from September 2020 detail what Lyon described at the time as a “Tahenista hit squad” of senior public servants include TAHE chief Anne Hayes and now-former Transport for NSW secretary Rodd Staples.
Of the entire project to house the transport assets in the separate entity, Lyon described it as “a good old fashioned stuff-up, followed by a pretty tragic conspiracy to make it true”.
With a further hearing of the committee scheduled for next week, there are sure to be more details to come.
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Flying high
A short-term pay cut while he steered the nation’s largest airport through the industry-shaking pandemic is set to pay off in spades for Sydney Airport CEO Geoff Culbert, who is headed for a near $10m personal windfall as part of the $23.6bn takeover.
The listed group and chairman David Gonski on Monday said it was backing the $8.75-a-share offer from the largely super-backed consortium Sydney Aviation Alliance, the two progressing to the next stage after a lengthy courtship since July.
If the deal can pass its raft of implementation conditions, it’s happy days for Culbert after scoring a solid parcel of 400,000 rights as part of the group’s retention plan in late 2020, any vesting conditions to be waived when the deal goes into effect, well before the slated 2023 test date. At the deal price, the recent issue alone is worth $3.6m to the exec.
Details in the scheme implementation deed lodged on Monday note that Gonski and his board will “accelerate the vesting of, or waiving any vesting conditions or vesting periods applying to, any or all Sydney Airport performance rights – or pay cash equal to the scheme consideration for rights”.
All up, and if the board sees fit to convert all rights held, Culbert’s total holdings are worth more than $9.7m at the offer price. Not a bad return on the 20 per cent pay reduction the chief executive took for three months at the height of the pandemic.
The same goes for chief financial officer Greg Botham, sitting on rights of $3m, and chief commercial officer Vanessa Orth with $3.2m.
All the more reason for the deal to proceed.
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Fitness push
Global fitness chain F45 and its local rich lister founder Adam Gilchrist are set to move into the pilates movement, this week picking up the Sydney-based nightclub-inspired pilates franchise Vive Active from local entrepreneurs John and Louise Keats in a bid to take the group global.
The deal for the chain and its three Sydney sites so far marks the first acquisition by the Mark Wahlberg-backed F45 after listing on the NYSE earlier this year in a blockbuster $2bn IPO.
While the purchase price has been kept under wraps, Margin Call hears it is to be funded by its already quite flush cash reserves.
It marks a quick ascent for former car dealer John Keats, the self-professed fitness addict based out of NSW’s Southern Highlands, where he is said to be an exercise buddy of Biggest Loser trainer Michelle Bridges, who started the chain in 2017 after establishing his career in used-car sales and vehicle finance.
Things look to be panning out better in the fitness realm at least.
His Stratton Finance, for which he continues as a director and shareholder, had been tipped as a key growth asset for Carsales when it took a majority stake in 2014, but was promptly offloaded at a loss by the listed group after Kenneth Hayne’s banking royal commission called out the poor lending standards and customer gouging in the market.
These days, Stratton is focused on its latest CarConnect offshoot of the business, but as the Keats stay on board for Vive’s global expansion there’s likely to be greener pastures in pilates.
The deal will result in him and Louise, also a cookbook author and granddaughter of culinary royalty Margaret Fulton, continuing to work in the business while they plot moves into the US market.
However, it’s sour grapes for world champion ironman Guy Leech, who was a co-founder in the early days of the chain but tapped out in 2018.
Same goes for Gilchrist’s former founder Rob Deutsch, who has since embarked on a rival to the functional training chain Reunion.
Adam Gilchrist, John and Louise Keats
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