WAM Capital wins freezing orders against Nick Bolton’s Keybridge Capital; Strike Energy’s hefty wage bill

Nick Bolton’s assets have been frozen following a court win for Geoff Wilson’s WAM Capital. Picture: David Geraghty

Describing the affairs of Nick Bolton and his Keybridge Capital as “messy” would be redundant. But matters appear to be spiralling out of control for the corporate raider.

Keybridge has been suspended from trading since March, is locked in a battle with the ASX over its disclosures, and Geoff Wilson’s WAM Capital last week won temporary freezing orders over Bolton’s assets.

Bolton and Keybridge have been locked in a blue with WAM Capital, Keybridge’s biggest shareholder, since last year over whether profits from the corporate raider’s successful tilt at Magellan options have been correctly recorded in the company’s accounts.

To cut an interminable story short, WAM claimed that about $5.6m of those profits “disappeared”. Bolton and Keybridge deny any wrongdoing.

WAM Capital founder Geoff Wilson. Picture: Nikki Short

The spillover from the fight, which is playing out in the NSW Supreme Court, has seen Keybridge suspended from trading since March, after the ASX intervened to query Keybridge’s half-year financial reports. Those queries focused on Keybridge’s dealings with related parties, namely Bolton and fellow Keybridge director Anthony Catalano, specifically around the “timeliness and adequacy” of disclosures on a deal to pay Bolton $4.75m of the $17.8m won from its options fight with Magellan – which included a standstill agreement preventing both from trading in Magellan securities for two years, when the payment would fall due.

The ASX also took exception to Keybridge’s disclosures around the payment of success fees to Catalano, also related to the Magellan fight.

But the latest move in the fight hits Bolton personally, with WAM having won orders temporarily freezing Bolton’s assets on September 20.

In previous disclosures Keybridge said it had lent the money due to Bolton to an “asset rich” entity associated with its managing director, on commercial terms, to be repaid when the fees came due.

That unnamed company turned out to be an Italian-registered company called Crotto del Nino which, according to the NSW Supreme Court “appears to own buildings and land in Como, Italy”.

Bolton told the court the money had since been moved on from Crotto to its own creditors, leaving open the question of whether Keybridge would be able to recoup the money if repayments weren’t made.

In making the orders, Justice Ashley Black noted that WAM made out “potentially a strong case” that directors duties had been breached making the loan.

“The nature of this transaction is such that I should find that there is a real risk that Mr Bolton would remove any remaining Australian assets outside the jurisdiction, if not restrained from doing so,” he said.

No doubt appeals have been filed, and the matter will continue to wend its ugly way through the legal system.

Keybridge is also yet to file its audited annual financial accounts – but did manage to appoint a new director on Monday, with Sydney lawyer Richard Dukes making a return to the company’s board four years after being voted off amid Bolton’s similarly messy fight with Farooq Khan’s Bentley Capital.

Last-day laggards

The last day of September is always a frenetic one on the ASX as hundreds of the bourse’s minnows rush out annual reports to meet deadline.

While the outrage about buried bad news usually takes a few days to gather pace as shareholders sort through the wreckage of stocks they were assured were ten-baggers, Monday brought a few highlights in the grievance stakes.

Junior copper-play Cyprium Metals had a good day on the market, after announcing it had finalised a loan deal with Glencore to revive the Niffty copper mine in Western Australia – previously the graveyard of a host of listed companies.

John Poynton. Picture: Colin Murty

But buried in the company’s annual report, released at the same time, was the news it had also paid out $1.1m to former managing director Clive Donner for only five months’ work. The figure included only $63,499 for salary or consulting fees, $408,777 in share-based payments, and a hefty $581,307 in termination benefits.

Cyprium declined to comment as the payout was subject to confidentiality clauses – but nice work if you can get it.

Also likely to face some shareholder questions come its annual meeting is the $618m-rated Strike Energy. Strike has had a pretty good year, to be fair, getting its Walyering gas project into production and starting to book revenue, with $45.5m for the year.

But the company’s $6m tab for management and board fees, including $1.4m for managing director Stuart Nichols and $236,291 for chairman John Poynton, raised eyebrows even in West Perth circles. Contacted, Nicholls was at pains to point out the company hadn’t planned on being last-day laggards for its annual report, but was forced to put off its release due to factors beyond its control. And special mention to Star Entertainment, which released its eagerly-awaited audited accounts at 5.30pm.

Baby’s celebration

Unable to watch the AFL Grand Final because you were a bit busy on the day? Perhaps tied up in a birthing suite? It’s OK, because the Victorian government still has a way to celebrate the day and help Tim Pallas fill a few more cracks in the state’s budget black hole at the same time.

Social media has been filled with novel ways to cash in on the Lions’ victory since Saturday. LinkedIn, in particular, has been full of the usual strained attempts to turn the Swans flogging into faux management lessons for the feeble minded – special mention to the wind engineer trying to drum up consulting work by pointing out that throwing a bit of grass in the air after the coin toss won’t actually help judge wind conditions at the MCG.

But Margin Call’s eye was particularly caught by a promotion from Victoria’s Department of Government Services, of all things, advertising “commemorative birth certificates” sporting the child’s (presumed) footy club of choice.

You can’t use them as an actual birth certificate, and you’d have to guess they’d be quietly buried away if the child ever broke with their parent’s club of choice – but Pallas will still be more than happy to take $90.70 for the privilege, plus another $55.80 for an actual birth certificate.

And two days after the final seems an odd time to market the idea – Brisbane fans might leap at the idea, but fans of the remaining clubs will be licking their wounds and hoping for better next year. And what Swans supporter would ever want to memorialise Saturday’s shellacking?