Fairfax Media's investigation into the collapse of Timbercorp and its aftermath has revealed that while staff and the public were given the hard sell to buy Timbercorp investments, the company was quietly agreeing to buy back millions of dollars worth of Timbercorp projects from family and friends of Timbercorp staff, prominent individuals and selected clients of favoured financial advisers.
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The names include a premiership-winning former AFL player, a high-profile Melbourne restaurateur and a Sydney silk. Several are high-profile racing figures with substantial business interests.
As a result of those decisions, those people have avoided the financial anguish that continues to this day, with Timbercorp's liquidator serving writs on hundreds of burned investors to claw back Timbercorp loans taken out to buy now-worthless Timbercorp investments.
Spreadsheets seen by Fairfax Media show that some of the projects were bought back in January, February and March 2009 – in the company's final weeks before it collapsed on April 23, 2009, with debts of $750 million.
Others were bought back in the mid to late noughties when – publicly at least – Timbercorp was flying high. But even then, returns on many of its horticulture and bluegum schemes were tracking well below forecast, leading to pressure from some investors to be allowed to bail out of the projects.
In at least one case, Timbercorp bought back projects to avoid public and costly legal action. A water-tight confidentiality agreement was part of the deal.
A Timbercorp insider said the company would decide which projects were bought back – it was not an option made available to all investors or "growers".
If the grower had an outstanding loan the consideration paid for the lots would be offset against the outstanding loan – often wiping the slate clean.
"Every single grower would have loved to have been given the opportunity to have their lots/project bought back during the 2008 and 2009 years," the insider says. "Unfortunately, those growers who did not have their projects bought back were left with a debt."
One of the biggest clutch of projects bought back – about $2 million worth – was from Michael Van Rens and associated people and companies. He was a key figure in collapsed miracle fuel pill company Firepower, dubbed the "most spectacular fraud in Australian history" by journalist Gerard Ryle.
APRA had disqualified Ven Rens as a superannuation trustee and investment manager in 2004 over an affair that embroiled a Perth-based super fund. While at Firepower, Van Rens was the chief spruiker of the company's unlisted shares, which were highly sought after in Perth as talk of its "miracle pill" hit a frenzy in the mid-noughties.
He is believed to be now living in the Philippines and could not be contacted. Just who he knew at Timbercorp, and why they agreed to pay him out, is unknown. He was paid out in June 2007, months after a planned Firepower sharemarket listing was scrapped, and just before it emerged that ASIC was investigating the company, which failed in 2008.
Against this backdrop, Timbercorp was taking a different tack with other investors – issuing legal threats to those who were in arrears. In 2008 and early 2009, people were stopping paying back their loans as talk circulated about the poor yields on projects. One investor repeatedly emailed the company in late January 2009 asking for information about the proceeds of the project versus its projected yields.
"I would expect the courtesy of a reply before [legal] threats are made," the investor said.
On the same day, the database reveals that several projects were bought back by Timbercorp from selected investors, including from an executive at a financial services company. When contacted by Fairfax Media, the executive said: "The transaction you refer to occurred at arms' length and in the ordinary course. It resulted in me paying out the value of my loan."
Buy-back bonanza
Some investors had their Timbercorp projects bought back, while others still owe hundreds of thousands of dollars.
The footballer
A former AFL premiership player had investments in Timbercorp's earliest almond and olive projects that were bought back in March 2009 – the month before Timbercorp collapsed – clearing his $20,000 loan.
The barrister
This Sydney silk reached a settlement with Timbercorp in 2007 after threatening to sue over an under-performing olive scheme. He had invested about $2 million.
The racing identity
This racing and corporate high-flyer owed $160,000 on a Timbercorp citrus project. His investment was bought back in January 2009 and his debt almost completely cleared.
The restaurateur
This Melbourne-based hospitality figure had her three-year-old olive projects bought back in 2006. Her loans of $67,000 were cleared.
The financial services executive
This corporate figure had a $77,000 citrus investment bought back in January 2009. The executive told Fairfax Media the transaction occurred at "arm's length".
The victims
Some 2714 ordinary investors have lost almost all equity in the projects and still owe $394 million. Hundreds have been served writs by Timbercorp's liquidators seeking repayment of the debts.
