Pyne leaves no stone unturned; Saorsa Health boss’ cut-and-paste blunder

Is Christopher Pyne’s company encroaching on rival territory over naval lobbying contracts? Picture: Kelly Barnes

Strange, stealthy manoeuvrings out of lobby shop Pyne and Partners, run by former defence minister Christopher Pyne.

A piece of bad news landed this week when one of his marquee clients, Hanwha Ocean, found out that it had been scratched from bidding on a shipbuilding contract being sought by the Australian navy.

Hanwha wasn’t alone in being dumped. Also cut was the Spanish shipbuilder Navantia, leaving just two contenders – Japan’s Mitsubishi Heavy Industries and Germany’s ThyssenKrupp Marine Systems, both now vying for the $11bn booty.

All of the players circling each other in these hostile waters recruited a set of cutthroat lobbyists to maximise their bids, of course.

The South Koreans chose Pyne while the Spanish signed CMAX Advisory, run by former Rudd government staffer Christian Taubenschlag, with Joel Fitzgibbon in the pocket as a special counsel

The Germans picked John Brenton’s Labor-heavy TG Public Affairs, meaning they were edged along by Stephen Conroy and Kim Beazley. We hear Arthur Sinodinos, a former Liberal cabinet minister and US ambassador, has just joined the firm’s board, so calling them “Labor heavy” might no longer be practical.

Kim Beazley.

Arthur Sinodinos.

The Japanese, meanwhile, went with Mark Sjolander’s Indo Pacific Advisory, a bit of a one-man outfit and midget sub among this fleet of well-stocked dreadnoughts. Whatever he did, it seems to have worked.

And so, presumably wounded by Hanwha’s dismissal from the bidding, we hear Pyne’s team tried cuddling up to their client’s competition just days after the news dropped. They were seeking to, you know, mutually help each other out.

Connecting on LinkedIn, Pyne’s senior associate, Jack de Hennin, wrote to a ThyssenKrupp executive about the government’s decision to advance the German bid on the SEA 3000 project.

“We have a few Australian-owned clients that would be a great supply chain value add to your proposal, or be good to connect with otherwise,” de Hennin wrote, and we’re led to believe de Hennin didn’t receive much more than a polite brush off in reply. Props for trying, buddy.

So, Hanwha’s out, and fickle Pyne sidles up to the Germans in line to win – is that it? Was this an attempted poaching? We hadn’t seen this level of belligerence since that Chinese fighter jet dropped chaff in the South China Sea.

Plus, isn’t it odd – even for the perverse world of lobbying – to approach a client’s most serious competitor to ask for a meeting, on a project where the swordplay between them became so intense?

Pyne’s response to all of this was a cryptic crabwalk. He said the approach to ThyssenKrupp was made on behalf of his firm’s existing client base. “We leave no stone unturned for our clients.”

And Tony Soprano’s in the waste management business.

Too good to be true?

When your business is in a bit of trouble and angry investors are banging on the door, the last thing you want to do is give them an easy way to swap notes and marshall their forces.

But that’s exactly what Saorsa Health managing director Aiden Garrison managed to do this month, when pasting a long list of investor emails into the cc column, rather than the one marked bcc.

It’s a rookie error, and often a source of amusement and irritation in offices across the globe.

In this case, however, the mistake allowed some 200 or so investors who kicked in at least $100,000 each – and much more in many cases – to get in touch.

Saorsa is a would-be housing developer for NDIS recipients. A topic much in the news these days after the corporate regulator stepped in at David McWilliams’ ALAMMC Developments after discovering McWilliams appeared to have punted $39.5m worth of investor money across the table at Star casinos rather than building houses for the disabled.

Matters at Saorsa have not reached that point, but unhappy investors tell Margin Call they’ve got plenty of reasons to be worried.

Aiden Garrison.

David McWilliams.

Garrison and business partner Will Mckellar raised an estimated $45m from investors to develop nine properties for use by NDIS participants, telling each they could expect a 10 per cent interest on their cash, plus another 15 per cent when the houses were built and sold.

Sadly, it turned out to be too good to be true. Saorsa made the interest payments on the first tranche of properties, and was paying interest on later developments to some investors until at least May.

But multiple investors tell Margin Call they never got their principal back, let alone the “bonus” 15 per cent promised when they ponied up the cash.

Curiously enough, though, property records show that the first development – apartments in the Brisbane suburb of Cannon Hill – was sold for $3.75m in February. The price was well under the $4.6m estimated market value of the property in Saorsa’s investment documents, but you’d think it would be enough to see some capital returned to investors.

Instead all they’ve received is a steady diet of excuses and promises of a major investment from the UK which will make everything right – sadly delayed, however, due to those pesky regulators in London and the EU nitpicking just as the money was about to come through.

Sadly, the extent of the problems only became clear after Garrison sent his ill-fated email, and gave Saorsa’s 200 or so investors the chance to swap stories. That note said Saorsa was “exploring collaboration with Grant Thornton to develop a restructuring plan aimed at reinforcing our strategic foundations” – which, frankly, doesn’t sound good.

And as for Garrison? He denied last night that Saorsa was insolvent, and said some investors had received both principal and bonus interest.

“Some investors have received a full return, while others have received partial returns. Although certain properties are less viable due to rising construction costs and reduced NDIS rental income, we have alternative properties that will allow us to fulfil all payment commitments to investors,” he said.

We hear Garrison is off to London on Thursday to try to finally nail down that new investor, or something of the sort. Here’s hoping, for the sake of his investors, that he isn’t just stringing them along yet again.